In the current real estate market there is a lot of "Blood in the Water". (People are losing a lot of money and the stakes are high.) That makes for some chaotic times in real estate.
The point of this blog is to explain how to properly make an offer on a home and and get your asking price and avoid creating more chaos. Enjoy.
(Disclosure) If you are a seasoned buyer/investor this blog is not intended for you. (you have experience) In this blog I'm speaking to 1st time home buyers (or very emotional people) that might need some "advice and guidance".
Relax and accept that you're not an expert.
These days every buyer wants a killer-deal on buying a house. The problem we see is, it seems the more uneducated the buyer, the more ridiculous the offer. It also seems, the tighter they are on cash, the more ridiculous the offer. Yes it is frightening buying a home for the 1st time but there has to be more "agent oversight" when fear strikes. Fear creates chaos and in some cases it looks more like a panic-induced feeding friendzy than real estate. Stress levels are high, couples start fighting, time is wasted over fighting over price then the buyer gets mad at the agent. Eventually after 3 days of hell, the seller stops responding or a better offer comes in... Then the buyer's gets delusional... "everyone is against me... even my spouse!" Sound crazy? Believe me it can be intense.
Can we all just be honest with each other? Short sales and Bank Owned homes are for buyers/investors that have cash to fix them immediately. ($10,000-70,000) If you have cash, we can find you some great prices. If you don't have cash to make immediate upgrades you won't be able to buy a picture-perfect home 30-40% under asking price. CAN WE ALL AGREE ON THAT?! OK.
First off, agents who are surviving and succeeding in this market are pricing the homes correctly without much cushion. As agents we have to price low in order to attract enough showings and offers. Plus we all know that the buyer will ask for closing costs. (3%)
Second, sellers don't have 30-40% negotiating room. And if the seller is an investor, and they've purchased a distressed property and put $70,000 dollars into it, not to mention months of work and time on the market.. Should they be able to make a profit? I think so as long as the home is still comping out close to other sold properties in the area.
We're not asking buyers to lay over and accept asking price, that wouldn't be any fun! What I'm telling you is to FIND A GOOD AGENT WHO YOU TRUST AND LET THEM ADVISE YOU. If you do this, the process will be smoother, less stressful and you'll still buy the home for a fair price. Trust in the professionals, that's why you hired your agent right? ("Oh yay, that makes sense.")
Are you a Piranha or a Great White Shark?
Both species get excited when there is blood in the water but their actions are completely different.
When the Great White decides to strike, he is unstoppable. He takes ONE calculated bite. (the initial best and highest offer) But here is the key.. If he doesn't like what he gets..(Counter offer). He moves on without hesitation. He is willing to swim away and allow the victim (seller) to bleed-out. So the seller fears two things from a Great White.
- His bite
- His willingness to move on
We all know what piranhas do. They take 5,000 tiny bites and the poor animal slowly bleeds to death in agony. No one wants to deal with piranhas. If you nit-pick a seller to death, you will waste so much energy that the seller will turn you down because you seem unreasonable. Or you'll waste so much time that another "bite" (better offer) will come in and you'll ending up loosing the house.
So which one will you be?
A Piranha or a Great White Shark?