Creating the perfect real estate purchase offer.
From InmanWiki
Deciding how much to offer a seller for a home you'd love to own is rarely easy.
Ideally, your offer price should not be above what you think the property is worth or what you can afford, but tempting enough to the seller that he can't refuse to accept. Arriving at that perfect offer price is harder in some markets than others, and it depends on a lot of factors that are beyond your control. For example, in buyers' markets where there is a lot of inventory, you may find more realistic sellers who understand that they need to be flexible if they want to sell.
In sellers' markets where there are more buyers than sellers, you may have no choice but to offer more than the asking price if you hope to be the successful bidder. The first step to arriving at an effective offer price is to find out how much properties similar to the one you're interested in have been selling for recently.
Look at the relationship between the list and sale prices of each listing. Did they sell for more or less than the asking price? How long did it take them to sell?
Your real estate agent can provide you with this information. Ask for a Comparative or Competitive Market Analysis (CMA) for the listing in question. Then ask your agent to talk to the listing agent and find out how much attention the listing is receiving. Are there any other buyers serious about writing offers? If so, you'll have to offer more than you will if there is no other serious interest.
How much you need to offer to pique the seller's interest will depend a lot on how long the listing has been on the market. A seller may snub a less-than-asking-price offer if the listing is new on the market. However, if the listing is weeks old and there are plenty of new listings coming on the market each week, you may be successful with an offer for less than asking. How much a seller will negotiate usually depends on several factors: how long the property has been on the market, whether the seller is motivated (that is, he really needs rather than just wants to sell) and how realistic the seller is about the current value of his home.
HOUSE HUNTING TIP: You can save yourself a lot of time and aggravation by asking your agent to have a heart-to-heart talk with the listing agent before you make an offer, particularly if you intend to offer significantly less than the list price.
If the seller is adamant about his price, and there are plenty of other similar listings on the market, devote your energies to a seller who is willing to sell at market value. Some buyers wonder if they should pay over asking in a strong market that could lose steam over the next year as interest rates rise. That depends on how the listing is priced. If it's priced below market value, it could attract multiple offers. If the property will suit your long-term needs, it may be reasonable to pay more than the list price as long as it's not more than you can afford now and for the long term. You won't lose money unless you have to sell during a down market. Don't be afraid to negotiate if you're not in competition. Some motivated sellers still can't resist trying for a higher price. Several rounds of counteroffers back and forth could bring about a successful conclusion.
THE CLOSING: But, promise yourself to walk away if the seller doesn't see the light.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers," and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books. Copyright 2006 Dian Hymer Retrieved from "http://www.inmanwiki.com/Real-Estate/Creating_the_perfect_real_estate_purchase_offer"
Tuesday, February 5, 2008
Saturday, February 2, 2008
DON'T LOOSE SIGHT OF THE BIG PICTURE!
Recently, I have had numerous prospective sellers tell me that they decided to hold off on their move because they didn't feel they had any equity in their homes.
When you look at your situation, todays real estate market can be slightly depressing to say the least.
When looking at the big picture however, you may have noticed that there are numerous properties on the market that are already priced well below value and previously sold prices. Some are still asking slightly more than what they are worth in todays market and it's unbelieveable BUT there are a few that are still way over (by 15% or more) what they would reasonably sell for in todays market. An experienced full time agent can help you assess your current situation to help you obtain the greatest amount of money for your current home AND, help you acquire a home for a great value.
Here is an example: I just had the honor of working with a client that bought a home in the Royal Oak area 3 1/2 years ago for $232,000. They put 20% down and mortgaged $186,000. They were shocked when reviewing recent comps that showed a value of approx. $185,000 to $195,000. The way they were looking at it, they felt that their down payment was lost. So they made the painful decision to stay put. Luckily (I was referred to them while they were still willing to look at what I had to offer them.) Upon closer look at their situation, we worked through the following scenario. (If they had decided to rent the same home to live in for the past 3 years, rent would have run them $1,350 a month or $48,600 for 3 years of housing.) *And while their home had already been for sale for 5+ months with another agent. I was able to help obtain a buyer in less than 2 months for $194,500. (Please note that this is $11,100) more than if they would have rented for the past 3 years which I believe was a huge win for the seller as so many homes by that point have developed the stigmatta of being a problem property. So they were still ahead of the game and were able to use the tax bennefits by owning a home for the past three years to their advantage.
They have just purchased a home in Troy that sold 4 years ago for $415,000. While the home was in foreclosure and needed some work, the "as-is" appraisal came in at $348,000 and we were able to acquire it for them for just $260,000 which was a $88,000 to $145,000 swing in their favor. So even if we looked at the conservative side and calculated the $88,000 below value, they still had an almost $53,000 swing in their equity possition. They now own a home that is almost 3 times the size.
Long story short... I have been thanked nearly 37 times in the last 60 days for not letting them make a decision to stay put without all the facts. In addition, I have had three referrals already from these grateful clients who have now become friends.
The moral of the story... Looking at the market from only one perspective may hurt you. The big picture is what you need to consider.
A well experienced Realtor can be a major asset to you. Don't select your agent based upon what they charge. Select your agent based upon the value and RESULTS that they bring to the table.
There are many agents that compete based upon the commission that they charge. (I say that this is because they probably don't have anything else to compete on such as experience or even a true marketing plan to get your home sold.) Simply sticking a sign in a sellers front yard today doesn't do the trick.
When you look at your situation, todays real estate market can be slightly depressing to say the least.
When looking at the big picture however, you may have noticed that there are numerous properties on the market that are already priced well below value and previously sold prices. Some are still asking slightly more than what they are worth in todays market and it's unbelieveable BUT there are a few that are still way over (by 15% or more) what they would reasonably sell for in todays market. An experienced full time agent can help you assess your current situation to help you obtain the greatest amount of money for your current home AND, help you acquire a home for a great value.
Here is an example: I just had the honor of working with a client that bought a home in the Royal Oak area 3 1/2 years ago for $232,000. They put 20% down and mortgaged $186,000. They were shocked when reviewing recent comps that showed a value of approx. $185,000 to $195,000. The way they were looking at it, they felt that their down payment was lost. So they made the painful decision to stay put. Luckily (I was referred to them while they were still willing to look at what I had to offer them.) Upon closer look at their situation, we worked through the following scenario. (If they had decided to rent the same home to live in for the past 3 years, rent would have run them $1,350 a month or $48,600 for 3 years of housing.) *And while their home had already been for sale for 5+ months with another agent. I was able to help obtain a buyer in less than 2 months for $194,500. (Please note that this is $11,100) more than if they would have rented for the past 3 years which I believe was a huge win for the seller as so many homes by that point have developed the stigmatta of being a problem property. So they were still ahead of the game and were able to use the tax bennefits by owning a home for the past three years to their advantage.
They have just purchased a home in Troy that sold 4 years ago for $415,000. While the home was in foreclosure and needed some work, the "as-is" appraisal came in at $348,000 and we were able to acquire it for them for just $260,000 which was a $88,000 to $145,000 swing in their favor. So even if we looked at the conservative side and calculated the $88,000 below value, they still had an almost $53,000 swing in their equity possition. They now own a home that is almost 3 times the size.
Long story short... I have been thanked nearly 37 times in the last 60 days for not letting them make a decision to stay put without all the facts. In addition, I have had three referrals already from these grateful clients who have now become friends.
The moral of the story... Looking at the market from only one perspective may hurt you. The big picture is what you need to consider.
A well experienced Realtor can be a major asset to you. Don't select your agent based upon what they charge. Select your agent based upon the value and RESULTS that they bring to the table.
There are many agents that compete based upon the commission that they charge. (I say that this is because they probably don't have anything else to compete on such as experience or even a true marketing plan to get your home sold.) Simply sticking a sign in a sellers front yard today doesn't do the trick.
Monday, January 28, 2008
Distress sale-Short sale-The Sellers perspective
IN TODAY'S MARKET, MANY REALTORS STILL LACK ONE SKILL
NOT all agents have one tool in their toolbox or know about it yet and even if they have heard about it, don’t have a clue on how to successfully put one together. If you are a seller that has fallen down on your luck and are in distress due to (loss of job, death of spouse, divorce, major illness, etc…) and owes more on your home than what it is worth, but do not know that a short sale may be an option, consider contacting me as I have had a tremendous amount of recent experience in negotiating short sales with the banks.
Just to make sure we're on the same page, a short sale is simply when a lender accepts less for a home than is currently owned.
Now a few years ago, doing short sales with banks were almost heard of. These days, things are quite different. So if short sales are so powerful, why aren't more agents doing them? Because there's a huge obstacle in the way, and based on my experience, the biggest obstacle to doing short sales is that each one is still somewhat unique so it almost has to become a specialty. Many agents are afraid of making it a specialty and getting out of their comfort zones.
There are certain myths floating around out there that I want to dispel:
Short Sale Myth #1: Banks Won't Do Them... A few years ago, when the market was hot, this was largely the case. Banks had no financial incentive to do short sales. There was simply no need. In today’s market, things are different... Banks are in business to make money. They can't make money when their customers default on their mortgages.
When a bank is forced to foreclose on a property, that REO inventory prevents the bank from lending a certain amount of money as they need to have cash in reserve, and a bank can't make money if it can't lend money. A foreclosure is bad business for a bank.
That means there is a huge upside for doing short sales. These days, banks are motivated to minimize risk as much as possible. A properly structured short sale does that for them.
Short Sale Myth #2: Not All Banks Do Them...
This one is simple. ALL major lenders do short sales. In fact, they have entire departments dedicated to that very thing. It's called the loss mitigation department. I am well experienced in speaking their language. It's just that sometimes what they SAY they'll do and what they'll actually do are two different things. Experience in this area helps tremendously.
Short Sale Myth #3: Lenders Won't Pay Commissions... The bank doesn't care primarily about commission. The bank cares about their bottom line, (NET to them) so it really does not cost you (the seller) a dime.
Short Sale Myth #4: Sellers Facing Pre-Foreclosure Will NOT Be Cooperative... This is one of the biggest myths out there. Once I have been able to take a seller through the scenario and explain how foreclosure stays on their credit for 10 full years vs. allowing me to help them properly package and dispose of their property for the bank (which may get them out with a 14-24 month ding on their credit) and prevent the foreclosure from actually hitting their credit report, they are all for it! So sellers are cooperative and this couldn't be further from the truth. Here are the simple facts: Doing a short sale keeps you (the seller) from losing your home to foreclosure. It keeps you from having the negative mark of a foreclosure on your credit. That's HUGE! Does it really make sense that you would be "uncooperative" for helping you save your credit? When you help solve big problems for people, they tend to be VERY cooperative.
Short Sale Myth #5: Short Sales are HARD...
Yes, short sales are a different animal. They do require a lot of work and require patience and persistence. They aren’t rocket science though. To do short sales, I have had to learn the process. It's a new skill that most Realtors simply don't know.
BEWARE- Of course, you can't take two steps without tripping over the newest "we'll close your short sale for you" company. They charge a fee for this "service." By the way, it's often non-refundable. My fee is a success based fee and again, (it is built into the transaction) so it comes out of the NET loss to the bank and the bank actually pays it.
SO CONTACT ME IF YOU CAN'T SELL YOUR HOME BECAUSE YOU OWE MORE ON IT THAN WHAT TODAY'S MARKET MAY BRING… A Short-Sale may be your best bet! contact me at 248-283-0181.
NOT all agents have one tool in their toolbox or know about it yet and even if they have heard about it, don’t have a clue on how to successfully put one together. If you are a seller that has fallen down on your luck and are in distress due to (loss of job, death of spouse, divorce, major illness, etc…) and owes more on your home than what it is worth, but do not know that a short sale may be an option, consider contacting me as I have had a tremendous amount of recent experience in negotiating short sales with the banks.
Just to make sure we're on the same page, a short sale is simply when a lender accepts less for a home than is currently owned.
Now a few years ago, doing short sales with banks were almost heard of. These days, things are quite different. So if short sales are so powerful, why aren't more agents doing them? Because there's a huge obstacle in the way, and based on my experience, the biggest obstacle to doing short sales is that each one is still somewhat unique so it almost has to become a specialty. Many agents are afraid of making it a specialty and getting out of their comfort zones.
There are certain myths floating around out there that I want to dispel:
Short Sale Myth #1: Banks Won't Do Them... A few years ago, when the market was hot, this was largely the case. Banks had no financial incentive to do short sales. There was simply no need. In today’s market, things are different... Banks are in business to make money. They can't make money when their customers default on their mortgages.
When a bank is forced to foreclose on a property, that REO inventory prevents the bank from lending a certain amount of money as they need to have cash in reserve, and a bank can't make money if it can't lend money. A foreclosure is bad business for a bank.
That means there is a huge upside for doing short sales. These days, banks are motivated to minimize risk as much as possible. A properly structured short sale does that for them.
Short Sale Myth #2: Not All Banks Do Them...
This one is simple. ALL major lenders do short sales. In fact, they have entire departments dedicated to that very thing. It's called the loss mitigation department. I am well experienced in speaking their language. It's just that sometimes what they SAY they'll do and what they'll actually do are two different things. Experience in this area helps tremendously.
Short Sale Myth #3: Lenders Won't Pay Commissions... The bank doesn't care primarily about commission. The bank cares about their bottom line, (NET to them) so it really does not cost you (the seller) a dime.
Short Sale Myth #4: Sellers Facing Pre-Foreclosure Will NOT Be Cooperative... This is one of the biggest myths out there. Once I have been able to take a seller through the scenario and explain how foreclosure stays on their credit for 10 full years vs. allowing me to help them properly package and dispose of their property for the bank (which may get them out with a 14-24 month ding on their credit) and prevent the foreclosure from actually hitting their credit report, they are all for it! So sellers are cooperative and this couldn't be further from the truth. Here are the simple facts: Doing a short sale keeps you (the seller) from losing your home to foreclosure. It keeps you from having the negative mark of a foreclosure on your credit. That's HUGE! Does it really make sense that you would be "uncooperative" for helping you save your credit? When you help solve big problems for people, they tend to be VERY cooperative.
Short Sale Myth #5: Short Sales are HARD...
Yes, short sales are a different animal. They do require a lot of work and require patience and persistence. They aren’t rocket science though. To do short sales, I have had to learn the process. It's a new skill that most Realtors simply don't know.
BEWARE- Of course, you can't take two steps without tripping over the newest "we'll close your short sale for you" company. They charge a fee for this "service." By the way, it's often non-refundable. My fee is a success based fee and again, (it is built into the transaction) so it comes out of the NET loss to the bank and the bank actually pays it.
SO CONTACT ME IF YOU CAN'T SELL YOUR HOME BECAUSE YOU OWE MORE ON IT THAN WHAT TODAY'S MARKET MAY BRING… A Short-Sale may be your best bet! contact me at 248-283-0181.
Saturday, December 15, 2007
Spreading the word!
I like to spread the word about really good service that I receive and send my friends (Or even take them to my favorite restaurants, shops, etc... when I enjoy the service.)
In Real Estate, I get to meet new people everyday and I see my job as more than just sticking a for sale sign in a clients' yard, running a few advertisements, holding an open house and praying that a clients home brings activity and offers. Some call that "The Real Estate Business." I tend to look at it a little differently. I have always looked at all business's and tried to imagine that I own that specific restaurant, shop, bar, car wash, etc... and think of how I could improve that business if I owned it. It has become a habit of mine that I really enjoy.
A passion for helping people spills over into my own personal real estate practice as a real estate agent. Since 1996, I have never once followed the pack and just went through the motions. I have always looked at my practice as a business and everyday there are improvements that I can make. (I know it.) In-fact, I have had partners and assistants along the way and it seems as though my business is always changing and constantly improving. I am always looking to stay on the cutting edge with websites, blogs, cell phone technology with database capabilities, recorded information lines with recordings for each property that I list which makes it easier for prospective buyers to get information on properties they are calling on, and by recently devoting a totally and separate domain name to each property that I list for sale, (i.e http://www.509westhoustonia.com/) which will feature multiple photos and floor plans of my listings and give prospects the ability to map the property, learn more about it before they waste their time looking at a home they really wouldn't be interested in and more. I have devoted my business cards to my clients properties which promotes their homes first. I really feel that I have a marketing package which gives my clients properties total market exposure.
In addition to all the unique marketing that I have designed for my clients, I have also a dynomite team consisting of top notch mortgage lenders, title companies, home inspectors and handymen that are of the highest standards. Many agents are afraid to refer anyone. They are so afraid that if their references fall through and provide bad service that they will look bad and loose your business. (Yes, that may have been a fear of mine too for awhile.) Now, there is NO question in my mind that the individuals and companies that are aligned with me simply enhance the process of buying and selling. You see, I have known these team members for many years, used their services over and over myself AND we have plenty of testimonials from satisfied clients. Would you rather fly across the country first class or coach if price wasn't an issue? The answer is obvious. Cost should not be an issue with any of my partners because they are all competitive in their fees. The service, the results and the successful experience that you will benefit from will impress you. They have all impressed me!
While I have been in the business since 1996 and have ranked among the top Realtors nationwide for many years now, the biggest advances that have been made in my practice have come the last two to three years or so. It's time to blow the doors off the other agents however and spread the word! My services have been praised by many and I have been lucky enough to attract the attention of the local media as well on occasion. In this blog however, I am praising those that I have aligned with.
Spread the word. What have your experiences been in real estate? What are things that you would like to see happen throughout a transaction to improve the process for the customer and client? Let me know. I care about making the experience that I take people through a first class experience.
In Real Estate, I get to meet new people everyday and I see my job as more than just sticking a for sale sign in a clients' yard, running a few advertisements, holding an open house and praying that a clients home brings activity and offers. Some call that "The Real Estate Business." I tend to look at it a little differently. I have always looked at all business's and tried to imagine that I own that specific restaurant, shop, bar, car wash, etc... and think of how I could improve that business if I owned it. It has become a habit of mine that I really enjoy.
A passion for helping people spills over into my own personal real estate practice as a real estate agent. Since 1996, I have never once followed the pack and just went through the motions. I have always looked at my practice as a business and everyday there are improvements that I can make. (I know it.) In-fact, I have had partners and assistants along the way and it seems as though my business is always changing and constantly improving. I am always looking to stay on the cutting edge with websites, blogs, cell phone technology with database capabilities, recorded information lines with recordings for each property that I list which makes it easier for prospective buyers to get information on properties they are calling on, and by recently devoting a totally and separate domain name to each property that I list for sale, (i.e http://www.509westhoustonia.com/) which will feature multiple photos and floor plans of my listings and give prospects the ability to map the property, learn more about it before they waste their time looking at a home they really wouldn't be interested in and more. I have devoted my business cards to my clients properties which promotes their homes first. I really feel that I have a marketing package which gives my clients properties total market exposure.
In addition to all the unique marketing that I have designed for my clients, I have also a dynomite team consisting of top notch mortgage lenders, title companies, home inspectors and handymen that are of the highest standards. Many agents are afraid to refer anyone. They are so afraid that if their references fall through and provide bad service that they will look bad and loose your business. (Yes, that may have been a fear of mine too for awhile.) Now, there is NO question in my mind that the individuals and companies that are aligned with me simply enhance the process of buying and selling. You see, I have known these team members for many years, used their services over and over myself AND we have plenty of testimonials from satisfied clients. Would you rather fly across the country first class or coach if price wasn't an issue? The answer is obvious. Cost should not be an issue with any of my partners because they are all competitive in their fees. The service, the results and the successful experience that you will benefit from will impress you. They have all impressed me!
While I have been in the business since 1996 and have ranked among the top Realtors nationwide for many years now, the biggest advances that have been made in my practice have come the last two to three years or so. It's time to blow the doors off the other agents however and spread the word! My services have been praised by many and I have been lucky enough to attract the attention of the local media as well on occasion. In this blog however, I am praising those that I have aligned with.
Spread the word. What have your experiences been in real estate? What are things that you would like to see happen throughout a transaction to improve the process for the customer and client? Let me know. I care about making the experience that I take people through a first class experience.
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