The low-ball offer has been non-existent for so long, that many Buyers don't even consider it anymore. It's coming back, Buyers, so readjust your thinking and consider properties that are a nudge over your price range, but have been on the market a while.
So, how do you do a low-ball offer right?
1. Acting predatory is going to hurt you - the Seller will be a lot more flexible if they don't feel like you're out to rob them blind. Don't enrage the Seller by offering them something off the wall like 10% of the asking price. Give 'em something to work with.
2. Make it worth their while - offer to accept responsibility for some repairs or the U&O, or a quick closing, etc. Give them something to console themselves with. ("Well, we took a real hit on the price, but it was worth it to get out from underneath that payment in 30 days.")
3. Be compassionate. Some of these people are strung out financially because of the current real estate market. STRUNG OUT. Some older people are taking a hit of tens of thousands of dollars because they waited 2 years too long to sell their house. Be thankful that you're not in their situation, and remember that you someday may be, and act accordingly.
Now, saying that - lowball your offer. You may be able to give these people what they need, which is a sale of their house. It's a very simple matter, $X is what you are willing to spend, and you hope that it works for the Seller. Try to figure out their motivation and structure the offer so that it gives them what they really need:
A vacant home where the Sellers have already moved? Give them an offer with a quick close and a streamlined inspection period.
A treasured family home? Show them that they'll be selling to someone worthy of the home who will be a good caretaker (and mentioning that you LOVE the house will go far).
An estate sale? Give them some flexibility on the settlement date, or offer to accept the home with some furniture or belongings in it.
Want some more info? Shoot me an email and I'll be happy to answer any questions you have...
Monday, October 1, 2007
Sunday, September 23, 2007
The $100K Flip and other Fairy Tale Creatures
You know a lot of the numbers thrown around on these shows are a bunch of garbage, right?
I really like that some of the shows are doing "re-visit" episodes where the homeowners admit that after carrying costs, Realtor's fees, etc. they walked away with very little (if anything).
There is a way to do it right, and market volatility doesn't mean the death of the flip. The basic concept doesn't change with the depressed market:
Figure out your Budget.
Buy Right.
Work Smart.
Price Right on the Back End.
The key to a successful flip is to be generous with your expenses and timelines (and make sure to figure in carrying costs, realtor fees, money to get in and out), and conservative with your re-sale price.
If you've considered flipping a home, the touted foreclosure epidemic might give you a wonderful opportunity to get into the game.
Want to talk further? I've successfully flipped 3 properties and work with several investors. Shoot me an email and we'll talk junker houses!
I really like that some of the shows are doing "re-visit" episodes where the homeowners admit that after carrying costs, Realtor's fees, etc. they walked away with very little (if anything).
There is a way to do it right, and market volatility doesn't mean the death of the flip. The basic concept doesn't change with the depressed market:
Figure out your Budget.
Buy Right.
Work Smart.
Price Right on the Back End.
The key to a successful flip is to be generous with your expenses and timelines (and make sure to figure in carrying costs, realtor fees, money to get in and out), and conservative with your re-sale price.
If you've considered flipping a home, the touted foreclosure epidemic might give you a wonderful opportunity to get into the game.
Want to talk further? I've successfully flipped 3 properties and work with several investors. Shoot me an email and we'll talk junker houses!
Sunday, September 9, 2007
Tough Love from Heather
Here is some plain speak regarding pricing. Now, I know no homeowner is going to want to hear this, especially one who is chasing down the market, always priced a bit too high to sell. But these things need to be said:
1. Buyers' first question when looking at a house is "How long has it been on the market?" followed quickly with either "Let's wait until they reduce." or "Wow! That long? Let's lowball them. They must be desperate." Your best bet is to price it right so that educated Buyers know it's a good deal and move on it immediately.
2. Mortgage companies are becoming brutally stringent with their appraisals. If the appraisal doesn't come in at contract price, you'll lose the deal or be forced to lower the price. There is no "stretching the market" anymore because banks are no longer flexible on their lending.
3. The ideal is to generate multiple offers. Sellers have true leverage when they have multiple offers on the house and can counter price, settlement, financing - whatever is most important to them.
4. In this vein, it's nearly impossible to UNDER-price a home, since you'll see a correction via multiple offers.
And finally...
In today's market, PRICING is going to make or break your home sale. All the good marketing, advertising, staging, or dark magic and voodoo in the world is not going to convince a Buyer to pay more for a home. It will simply sell your well priced home faster (although the dark magic and voodoo are suspect at this point.)
Don't despair homeowner - we can still sell your home for you and make you happy! Be reasonable. Be realistic. Be flexible. We'll get it done.
Need some more tough love? I'm always ready to dish it out. Shoot me an email!
1. Buyers' first question when looking at a house is "How long has it been on the market?" followed quickly with either "Let's wait until they reduce." or "Wow! That long? Let's lowball them. They must be desperate." Your best bet is to price it right so that educated Buyers know it's a good deal and move on it immediately.
2. Mortgage companies are becoming brutally stringent with their appraisals. If the appraisal doesn't come in at contract price, you'll lose the deal or be forced to lower the price. There is no "stretching the market" anymore because banks are no longer flexible on their lending.
3. The ideal is to generate multiple offers. Sellers have true leverage when they have multiple offers on the house and can counter price, settlement, financing - whatever is most important to them.
4. In this vein, it's nearly impossible to UNDER-price a home, since you'll see a correction via multiple offers.
And finally...
In today's market, PRICING is going to make or break your home sale. All the good marketing, advertising, staging, or dark magic and voodoo in the world is not going to convince a Buyer to pay more for a home. It will simply sell your well priced home faster (although the dark magic and voodoo are suspect at this point.)
Don't despair homeowner - we can still sell your home for you and make you happy! Be reasonable. Be realistic. Be flexible. We'll get it done.
Need some more tough love? I'm always ready to dish it out. Shoot me an email!
Thursday, August 23, 2007
Revenge of the Buyers
Oh yes...It's your time in the sun NOW first time homebuyers. Bask in your new found power and get out there and buy your house!
Reasonable sellers (even if it takes them several months to get to that point), the re-birth of seller's assist, and your prime position of having no home to sell make this a great time to buy. If you've been thinking about buying a home, I'd really suggest that you get serious about it now, especially if you need some help in the mortgage department.
We are starting to see a move towards old practice lending - you're going to need a reportable income, money down, and good credit to secure financing. If you need a no doc loan, or 100% financing, they can still be found, but the volatility of the mortgage market may make them more difficult to get in the future.
My suggestion: work with a responsible, seasoned mortgage lender (and I happen to have a great one - shoot me an email if you want his contact info) who will get you what you need without getting you into trouble and go shopping!
Reasonable sellers (even if it takes them several months to get to that point), the re-birth of seller's assist, and your prime position of having no home to sell make this a great time to buy. If you've been thinking about buying a home, I'd really suggest that you get serious about it now, especially if you need some help in the mortgage department.
We are starting to see a move towards old practice lending - you're going to need a reportable income, money down, and good credit to secure financing. If you need a no doc loan, or 100% financing, they can still be found, but the volatility of the mortgage market may make them more difficult to get in the future.
My suggestion: work with a responsible, seasoned mortgage lender (and I happen to have a great one - shoot me an email if you want his contact info) who will get you what you need without getting you into trouble and go shopping!
"What's that smell?" and 4 other things that run off Buyers...
Five of the quickest ways to drive Buyers out of your house...
1. Cooking smells, including: tuna fish (blech!), bacon, garlic, deep fry oil, etc. If you can still smell it after you've cleaned up, you shouldn't be making it while the house is on the market. Coffee and cinnamon buns? Good. Hot Dogs and Sauerkraut? Baaaaaad.
2. Giving Buyers a "tour" of your home. Buyers HATE (I mean really HATE) having the homeowner following them around telling them about the house. They really want to check out your closet and cabinet space, and to do it while you're there is rude for some reason. Besides, it always comes across as a little...desperate.
3. This is a touchy one...anything really personal that would make someone else uncomfortable. Nude portraits (even tasteful ones) above your bed, shrines to deceased loved ones, self-help books, etc. If it's private, remove it.
4. Animals freely roaming the house. I'm desperately afraid of birds. I once ran out of a house crying because some large parroty type thing squawked and dive bombed me. Once your animal scares someone, they spend the rest of the tour worrying about when BooBoo is going to eat them alive, rather than looking at your house.
5. Not wiping down the kitchen and baths. Your house should be spotless while showing (har har) but at the very least, make sure that the kitchen and bathrooms have been wiped down before a showing. A kitchen counter with crumbs or a bathroom with toothpaste on the sink or (ahem!) on the toilet seat gives the impression that the house isn't just "lived in" but "gross."
Want more? Shoot me an email and I'll regale you with more horror stories from my showings...
1. Cooking smells, including: tuna fish (blech!), bacon, garlic, deep fry oil, etc. If you can still smell it after you've cleaned up, you shouldn't be making it while the house is on the market. Coffee and cinnamon buns? Good. Hot Dogs and Sauerkraut? Baaaaaad.
2. Giving Buyers a "tour" of your home. Buyers HATE (I mean really HATE) having the homeowner following them around telling them about the house. They really want to check out your closet and cabinet space, and to do it while you're there is rude for some reason. Besides, it always comes across as a little...desperate.
3. This is a touchy one...anything really personal that would make someone else uncomfortable. Nude portraits (even tasteful ones) above your bed, shrines to deceased loved ones, self-help books, etc. If it's private, remove it.
4. Animals freely roaming the house. I'm desperately afraid of birds. I once ran out of a house crying because some large parroty type thing squawked and dive bombed me. Once your animal scares someone, they spend the rest of the tour worrying about when BooBoo is going to eat them alive, rather than looking at your house.
5. Not wiping down the kitchen and baths. Your house should be spotless while showing (har har) but at the very least, make sure that the kitchen and bathrooms have been wiped down before a showing. A kitchen counter with crumbs or a bathroom with toothpaste on the sink or (ahem!) on the toilet seat gives the impression that the house isn't just "lived in" but "gross."
Want more? Shoot me an email and I'll regale you with more horror stories from my showings...
Wednesday, August 22, 2007
Seller's Assist and the "But THEY got $ for their house!"
Do you know that the price listed as the "sales price" in the Real Estate Transactions in the paper is sometimes $5-10-15 THOUSAND dollars less than the true sales price?
In today's real estate climate, we are seeing the rebirth of "Seller's Assist." This is when the Buyer offers you a certain price for the home with the agreement that you are going to "kick back" some of the money at settlement to go towards their closing costs (or mortgage discount points, or repairs, or "decorating allowances"). It's important when you are pricing your home for sale that you get the NET sold price - the sale price minus any credits.
In the past few Comparative Market Analysis that I have done, I've had at least 2 of the comparative properties have some sort of credit given at settlement. It's important that you know that the price published in the paper is often grossly different from what the Seller walked away from the table with.
Have a question regarding Seller's Assist, or want to check the net sold price of a recent sale in your area? Shoot me an email and I'll get you the information!
In today's real estate climate, we are seeing the rebirth of "Seller's Assist." This is when the Buyer offers you a certain price for the home with the agreement that you are going to "kick back" some of the money at settlement to go towards their closing costs (or mortgage discount points, or repairs, or "decorating allowances"). It's important when you are pricing your home for sale that you get the NET sold price - the sale price minus any credits.
In the past few Comparative Market Analysis that I have done, I've had at least 2 of the comparative properties have some sort of credit given at settlement. It's important that you know that the price published in the paper is often grossly different from what the Seller walked away from the table with.
Have a question regarding Seller's Assist, or want to check the net sold price of a recent sale in your area? Shoot me an email and I'll get you the information!
Friday, August 17, 2007
Open Houses and Agency
The inaugural blog...the pressure is overwhelming! What to talk about? Myself? Selling Real Estate? Buying Real Estate? I guess I'll just pick a topic and run with it...
How about a quick comment on open houses, since the weekend is coming up?
If you're working with a REALTOR, or you have someone in mind who you would like to work with, it's pretty critical that you let the agent working the open house know that. If not, the agent working the open house can refuse to pay YOUR agent a commission (and your agent isn't going to work for free). Agents get paid by being the "procuring cause" (or the person who finds the Buyer) NOT for writing the contract.
Now, as a professional courtesy, most agents will honor agency if they're informed up front that you're working with someone, but you can sometimes run into a problem when you try to bring in your own REALTOR later on.
Also,you don't have to use the Open House Agent if you don't have a REALTOR and you love the house. If you don't want to have that agent representing both you and the Seller in the transaction (or you just don't like the agent!) ask them to refer you to another agent to act as your Buyer's Agent for the transaction.
Happy Open Housing!
How about a quick comment on open houses, since the weekend is coming up?
If you're working with a REALTOR, or you have someone in mind who you would like to work with, it's pretty critical that you let the agent working the open house know that. If not, the agent working the open house can refuse to pay YOUR agent a commission (and your agent isn't going to work for free). Agents get paid by being the "procuring cause" (or the person who finds the Buyer) NOT for writing the contract.
Now, as a professional courtesy, most agents will honor agency if they're informed up front that you're working with someone, but you can sometimes run into a problem when you try to bring in your own REALTOR later on.
Also,you don't have to use the Open House Agent if you don't have a REALTOR and you love the house. If you don't want to have that agent representing both you and the Seller in the transaction (or you just don't like the agent!) ask them to refer you to another agent to act as your Buyer's Agent for the transaction.
Happy Open Housing!
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