I recently had a deal fall apart after the home inspection.
It was a house that my buyer’s really fell in love with. They were crushed. The house didn’t inspect as well as we thought it would and the seller refused to do much negotiating.
It was a rough few days for them after this, but they eventually moved on.
We found an even better house that had a far better seller. This house suited their needs much much much better and was in far better shape.
This got me thinking about past clients who have had this same experience. I can’t recall any client who had to walk away from a house and didn’t find one that was even better.
Getting your dream home really is a process. You might lose a house or two in multiple offers these days. Some houses might sell before you even have a chance to see them. You might have a deal fall apart after a home inspection. But in the end, you’ll have the best house for you. Just ask my buyer’s who are very excited about their new place.
I love thinking. It’s one of my favorite things about this job.
I put on a new listing a few days ago. We pushed the pricing envelope a little.
We didn’t get any showings the first day, which is a good sign of how far we pushed it.
The second day we had several showings scheduled.
We got an offer from the first showing. It was for less than the full amount. Another sign we were pushing the asking price a bit. It was still a really good offer though.
My sellers asked about countering for full price. We really didn’t have much to lose by asking, so I said sure. I had a few things running through my mind though. I was thinking about how soft the market responded to this house at this price. I was thinking about how the buyer’s agent is somebody I know. She is a great agent. She knows that in this market, you have to make your best offer right off the bat…and their offer was below the list price. I was thinking to myself “What can I do to motivate these people to pay full price and not weaken our position to negotiate later?” I was afraid they would stick with their original offer and wait and see if we even got another offer. If we hadn’t gotten another offer, they would know that their offer was at least the best one we had or why would we be countering it? I also know the buyer’s agent would have asked if we had multiple offers. By saying no, it would be further proof that their offer was still the best and maybe the only one we would get. The buyer’s may have said no to our counter.
So, the only thing I could do was create a situation where they had to respond to our full price counter offer BEFORE the remaining showings happened. Once the last showing happened, we didn’t have anything to motivate them if we had not gotten another offer.
Then all the sudden, a thought popped in my mind. I asked my sellers if I got the buyers to go full price, would they be willing to sign off on it immediately. They said yes.
I then told the buyer’s agent that if her people would go full price, I would cancel the remaining showings and my people were holding their phones in their hands right now ready to electronically sign off on the deal.
A few minutes later, it was all done. The sellers are happy. The buyer gets a house in a tight market. And I get to work with an agent I trust and respect.
Two of the three houses I sold last weekend had multiple offers.
I’ve always said that what often wins a house in these situations has nothing to do with price. It is even more true in today’s market where almost every house sells for full price or slightly above. I know when I get multiple offers on my listings, it is amazing to see several different buyers all offer roughly the same amount, especially when it is over the list price.
The first one I sold was a for sale by owner townhouse. I knew the seller probably didn’t know what to do once he got an offer, and probably didn’t know how to determine which buyer was the best. So, I told him that I would handle everything for him and keep him in the loop on the progress of the sale. I also pointed out that my buyer had 20% down and was doing a conventional loan. I told him all the things that could go wrong with any sale, and that short of a cash buyer, my well qualified buyer would be the best one to pick.
And he did.
The other one was a hot new listing near Hamburg in the most competitive price range in Lexington. There were 9 showings the first day on the market. My buyers needed to roll their closing costs into the offer, so I was a little worried. I knew the only chance I had of getting this place for my buyers was to find out how to make it easy on the sellers to say yes to us. I asked the listing agent if the sellers knew where they were moving yet. If they did not have a house yet, my people could have rented back to them after the closing because they had several months left on a lease. The sellers have a contract on a house in a surrounding town. I got their closing date. I remembered that they had two small kids based on the way two bedrooms were decorated. No seller who is going to be a buyer likes the idea of moving out of their old house, closing it, closing their new house, and moving in….all in one day. Especially with kids.
We wrote a strong offer. I put our closing date the same day that the sellers are closing their new home. We also offered to let them have their old house for 48 hours after the closing just to make that process easier.
Later that day, the listing agent called me. She said both offers were practically the same. So much so that her sellers jokingly asked her if she had told both buyer’s agents what to offer. They couldn’t decide which offer to pick, so they asked their agent what to do. She advised them to accept our offer because she thought I was so nice to work with and for my concern in making the process easy for her sellers. Well, I am a nice guy, but my goal was to get this house for my buyers more than it was to make it nice for the sellers. That is just what we had to do to make our offer the most attractive.
So, both of my buyers got the house they wanted in multiple offers. Like I’ve said before, it isn’t always about price.
The market is full of people who know they can sell their old house in a heartbeat, but are worried that they won’t be able to find a house to buy…..so they do nothing.
Here are a few options for you:
IF you absolutely have to make an offer contingent on selling your old house, have the old one ready to list as soon as you make an offer. The listing agent for the house you want to buy will want to see it on the market ASAP. Many people focus on finding the right house and have done no prep work on their old house. They often end up losing their new house. Any decent agent will counter your offer with what is called a “Kick-out Clause.” That means that if another buyer comes along without a contingency, you either need to step aside or remove your contingency and buy the house. If your house isn’t ready to list, or isn’t appealing enough to sell immediately, odds are you will lose your new house. I know it is tough, but the best thing to do right now is focus on getting your old house ready to sell, THEN go look at houses. And every client I have in this situation is going to think I am talking to them when they read this, but I am talking to ALL my clients in this situation 🙂
The absolute best thing to do when you need to sell first is to…..just sell first. Yes, I mean sell your old house and find somewhere to live temporarily. Will it be fun? Heck no, but you will get top dollar for your old house and be in the best bargaining position on the new one since no seller today really wants to accept a contingency offer. If a seller accepts one, it is usually a sign that you are paying waaaay more than the next highest bidder and/or that you have selected a house that is having trouble selling in the hottest market ever. Neither of those are good.
IF you can buy the new one without having to first sell the old one, then do that. You know you will sell the old one quickly and it is really nice to be able to get the new one ready before moving in.
But what if you can qualify for the new house without having to sell, but you really want or need your equity from the old one for a down payment? Easy. Get a home equity line of credit on your old one and use it for the down payment on the new one. Sell the old one and pay it off. It’s a simple way of moving the equity you have from the old house to the new one.
You know what scares me when I see a house for sale and the seller has lived in the place for a very long time?
For most people, the only time they think about getting termite inspections are when there is a sale involved. While I don’t think you need annual inspections unless you just want to help your pest inspector generate revenue, you should do one at least every few years.
I was in a house last weekend that my buyer is considering making an offer on. Well, I guess they are still interested. I haven’t heard from them since I pointed out all the termite damage.
And there was a lot of damage. Fortunately most of it would be easy to fix. All you’d need is to sister a few new joists to old ones. The damage didn’t look any higher than that. I figure there is about $2-3k in work to be done. A termite treatment back in the 90s would have been much cheaper.
As the husband and I were walking around in the basement using our phones to look at all the joists, he said “This is why we like you.”
Who knows if they will make an offer on this house. If this isn’t the one, no worries. I know I am their realtor. I want to sell them the right house, not just any house.