As we kick off the 2018 real estate season, here are a few things buyers and sellers need to know:
- Make your best offer the only offer you write. Everybody wants a deal, but the odds of you getting a bargain are slim. You want to give your best offer because the market moves fast. Plan on negotiating with the seller and odds are somebody else will make an offer while you and the seller are going back and forth. This is especially true if it is a new listing.
- Get preapproved. You want the seller to want to deal with you. In a slower market, they would have to deal with you even if they didn’t feel like it. In a fast market, they know there is always another buyer out there. Don’t make them wonder if you can buy their house.
- Don’t write a letter telling the seller about yourself. Most of the time when I have gotten those, we have multiple offers and the seller never gets around to reading it until after they have sold the house. And do you know what most of them say to me after reading it? “If they loved the house that much, they should have made a better offer.” You want your offer to stand out? Let the seller pick the closing date if you can, or do the type of inspection where you can inspect it but won’t ask for any repairs. The seller will find that much more exciting that seeing a picture of you with your dog.
- Don’t ask for anything that wasn’t included with the house. Sellers think it is strange that you went shopping for their personal items. Also, if you write stuff that wasn’t offered in the listing that the seller doesn’t want give up, you force the seller to counter your offer without those items. Meanwhile that gives time for another buyer to make an offer. You might lose the house because you were trying to get the sellers coffee table or patio furniture.
- Don’t try to rush the seller. If it is a new listing, odds are they are getting multiple offers. The saying is the squeaky wheel gets the oil, but in real estate that just means you are annoying the seller. Most agents know that if you are annoying now, you will likely be annoying throughout the entire process. Think of it like a job interview. The seller has a big decision to make and is going to decide based on how you present yourself through the offer and your actions.
- Usually your first offer is your best offer. When I was a new agent, I was told this and really didn’t believe it, but 13 years experience in all types of markets tells me it is true. I might alter the saying to say the first “Reasonable” offer you get is usually your best. Occasionally I do see these crazy buyers who must be watching reruns of real estate shows from 2007 when sellers were desperate to sell…..but they aren’t living in reality.
- Don’t feel rushed. Buyer’s agents like to do things like give you 3 hours to respond to their offer. They do this hoping to get the house before anybody else does. The truth is in this time of having more buyers than houses, that buyer isn’t going to walk away. Only a few times in 13 years have I seen where a buyer has two houses they want and needs a fast response because they want to buy their 2nd choice house if it doesn’t work out with you. They usually will wait though since your house was their 1st pick.
- Think about what is most important to you. Everybody wants the most money, but sometimes a slightly lower offer that closes sooner, or lets you stay in the house for a few days after the closing, is appealing. Also, think about what you will accept before you get an offer. Most sellers don’t think about this until they get an offer and they have a lot of stress trying to process it.
- Don’t over price your house. Your house will eventually sell for what it was worth. Starting out with a realistic number accomplishes two things. One, it makes the process go faster. That means less time cleaning up your house and having to leave for showings. Two, you create a bit of a frenzy when it is a new listing. Buyers flock to new listings. They are afraid of losing it and will likely make their strongest offer. Once you get past that new listing period, buyers know there isn’t a risk of another offer and will try to negotiate more.
- That surround sound system you are so proud of? Leave it off during showings. It isn’t as important to buyers as it is to you. Don’t stink up every room with Glade Plug-ins. Buyers think you are covering an odor. People with allergies just want to leave your house. The average person can only hold their breath for like 40 seconds, and that is not enough time to see your house. Keep your house the cleanest it has ever been. Seeing those dried up specks of toothpaste in the sink is sort of like looking at used cars and seeing coffee stains around the cup holders or a french fry under the seat.
Happy buying and selling!
I sold two houses yesterday. Been a while since that happened. Always fun.
One was a new listing of mine and the other was a house for one of my buyers.
Two totally different situations.
I put my listing on at a competitive price. Not so high that it would scare off buyers, but just a bit over the recent sales with the hope that somebody would be afraid of losing the house and pay full price.
Four showings the first day and three offers. The first offer was a little under the list price. The next offer was the list price. The next one wasn’t the list price. The people who made the first one raised their offer and got it….but they came close to losing it.
The first people should have thrown out their highest and best offer right off the bat. It would have saved them from potentially losing it. For me personally, it would have meant eating a warm dinner. It was taco night and I love tacos.
When a new listing is priced right in this market, you should always make your best offer. You want to send an offer that the seller just wants to sign. Going back and forth takes time, and time is what other buyers need to prepare their own offer.
The other house I sold had been on the market for quite some time. Nothing was wrong with it at all. The only problem was the price. The seller started nearly $30k over what the sale price will be. They reduced it slowly all winter. My buyers almost didn’t look at it just because of the price. We made an offer. It was countered. We countered. They countered again. We went out and looked at more houses. They came back at a lower price and it all worked out.
I really think that if this house had been listed at a realistic price, it would have sold quickly and probably for more money.
Two houses in Lexington. Two totally different outcomes. Price makes all the difference, even in a hot market.
Two of the best days of owning a house are these:
1. The day I call you to tell you that the seller has accepted your offer.
2. The day I call you to tell you that we just got a really good offer.
When you hire me to be your realtor, I am thinking about both days. You may not be, and that is okay. That is what I am here to do for you.
We are currently in a market where everything sells. You can have two identical houses across the street from each other. Both exactly the same. One backs to green space. The other backs to the loading dock of a strip mall. Both sell fast and for the same price. Why? Because there are three buyers for those two properties. It was like this too back in the early 2000s.
But what do you think will happen when the market slows down. Maybe there is only one buyer and both of those identical houses are for sale again?
The seller backing to the green space sells their house for top dollar in record time because even in a bad market, the best houses still sell.
The seller backing to the loading dock watches the SOLD sign go up across the street. Then they watch the new neighbors move in. Their house is still on the market, even after reducing the price several times. They really need to sell because one of them starts their new out of state job next month and they can’t afford two mortgages. Then they wake up listening to an idling diesel truck at that loading dock. They remember how lucky they felt to get their house. How they beat out that other buyer in multiple offers by bidding as much as the green space house cost.
It is only now they realize that they made a bad decision all those years ago. That is how real estate works. You never know whether you made a mistake or not until you go to sell your house.
When you look at houses with me, I will always point out the negatives so you know what you are getting into. I’ve been doing this for a long time. I know what things buyers like and don’t like. I don’t want anything to be a surprise to you when you go to sell your home. What you do with that info is totally up to you, but I will always let you know because one day, you will be the seller and not the buyer.
A friend and I were talking this morning about what we would do with our time if we were independently wealthy.
I’m showing my Gen X roots here, but I said that Mr. Roarke from Fantasy Island had the best job ever. My decade younger friend who is still a Gen Xer but considers himself to be a millennial had not seen the show.
I described it has this: People come to Fantasy Island to live out one of their fantasies. Mr. Roarke is the gracious host who makes those dreams happen. Sometimes those dreams can bring harm to people and he has to intervene to protect them. He is always working even when the island guests don’t see him. He predicts what is about to happen and always warns his guests of the outcome, so they have time to adjust their decisions.
My friend replies with “Isn’t that a lot like being a realtor?”
Hahahaha. I guess it really is.
This has given me some ideas for my 2018 Christmas Card.
First time buyers. I’ve been working with a few of them lately.
Most first time buyers are thinking about finding a place they like.
I like to show them that their first house is so much more than that.
Every house you are ever going to own is impacted by that first one.
It is really the most important house you are ever going to purchase.
Because eventually you will sell that first house. How well of an investment it turned out to be will impact how much money you have to put down on your next house. It just keeps going until you are middle aged and in your forever home. You know, the one you sell to help fund your retirement when you downsize to a cheaper home.
My dad called this compounding. He was mainly referring to interest when he was teaching me this stuff in middle school, but it applies to real estate too.
It really reminds me more of bowling though. To get a strike, you don’t knock down every pin with the ball. You just hit one of them right and the pins begin to knock down the remaining pins.