- Patience before listing
- Avoiding the wrong “buyers”
- Deal making
- Knowledge of financing
This deal was _exciting_. Thankfully, the excitement yielded a significant return to the sellers.
The first great move they made was to wait until some work in the building had been completed. We wanted the prospective buyer to experience quality from the moment they walked into the building lobby, so patience as required.
The staging was fantastic; the pieces taken directly out of the sellers current home collection. The photographed beautifully.
With a few days on market, we received one offer (after my open house Saturday) and then another (on Seahawks Super Bowl Sunday). After further vetting of each of those buyers, they dropped out. The Sellers and I were relieved we had not gotten into contract with either only to fall out of contract.
The next weekend, we received another offer, which we countered on Monday. Just after the counter, we received another offer, significantly better than the last. After a bit of nail biting and fast contract work, we were able to withdraw the counter offer and accept the higher offer.
The result: Net Proceeds to the seller that were higher by more than the amount of my commission.
To see this seller's review on Zillow click here: http://u.zillow.com/w59ce/
While over a month old, this is interesting. I wonder: how does the percentage of hopeful first time home buyers compare to years past? Given that first time home buyers are typically younger, is their decline because homes became less accessible to them, or could it be that they are less interested in purchasing, due to aversion to risk (they have seen that depreciation is possible), they have more of a “sharing economy” mentality, or some other factor?
National Association of Realtors, www.realtor.org
I was recently asked by a buyer friend/client about whether the owner of an un-built lot that interests him would consider seller financing. Here are some things to consider:
-most banks don't offer land loans. It makes sense when you consider risk from their perspective. Unimproved land (lots) are more risky because without homes on them, they are far less liquid than properties with homes on them (improved).
-smaller local banks are more likely too; they "know" what they are lending on better than the bigger guys.
-most sellers want to sell because they want a lump-sum payment in order to buy something else, fund retirement, etc. While there are some exceptions – people who don't know where they would put cash if they get it because they don't want to buy more real estate and don't like stocks/bonds – most sellers turn to seller financing as a 2nd option. That is, if they can at least get someone to pay them a down payment and then monthly payments, they'll be getting some value out of their asset, but…they'd rather avoid the hassle and get the money quickly.
-so, if they think you can get approved by a lender, they will prefer that.
-and if they think you can't get approved by a lender, they will consider you a higher than normal risk, and will want to charge you more for the loan (higher rate).
-so, most buyers who are able to get loans end up doing so.
-call with questions!
Interesting presentation Wednesday at Windermere Premier Properties Breakfast. Gardner acknowledges potential economic issues (more national than regional) and posits that home prices in the Seattle Market may be underpriced v. the trend line. My take: that is likely true for some properties, and appreciation may cure all, but…in this market of low supply/high demand, there is always the risk of over-payment. Said more clearly, I think the value is there on a lot of the transactions out there, but…some of the new owners will need many years of appreciation to protect them from the risk of having to sell what they’ve bought in a Buyer’s market. Advice: It is OK to pay top dollar for a great property…but be mindful of resale value.
I am always intrigued by the $/unit number in these apartment building sales. I would think that this would be a relevant number for renters considering buying. This is the price that an investor is willing to pay to rent this space to you (presumably a premium for the right to use it to generate future revenue and a discount for volume). Would you pay that much to own it (or something similar) and control it yourself? Any other thoughts on this data point?
I just had another client ask me whether he should make an offer on a property he likes…Buyers typically ask this if they are worried about getting emotionally committed to a home and then not getting it; normally by being "beaten" out by other Buyers. Every case is different, but generally…make the offer. Unless you are so battle-worn that you just can't take it anymore…dust your shoulders off and get back in there. You can't win if you don't play. Better to play and lose than to not play and see someone else win a game that you could have won.
I often hear Buyers worrying about showing too much interest at an open house. The rationale is generally that they don’t want to compromise their position in the event they make an offer. That is, they don’t want to seem like they want it “too badly,” because that puts them in a vulnerable spot. That is potentially relevant in a Buyer’s market. And, even in a Seller’s market, a potential Buyer should not walk through the property verbalizing how much over the asking price they are willing to pay, but…remember that you are being watched!
Anything you say can and will be used against you in a court of multiple offers.
Have you thought through, for instance, what happens when a Seller can’t decide which of several multiple offers to choose? Often times that Seller asks her agent something like “Well, did you meet any of them? What did you think?” In a recent case, my client began the narrowing of four pretty similar offers by eliminating the hopeful Buyer who asked me – after I told him that we had an offer and a couple more coming in – whether I thought my client would take less than the asking price. I’m sure to this person it seemed like something he just had to ask; “couldn’t hurt” he probably thought. Maybe someone at “his table” (one of his advisors; a self-appointed negotiator, perhaps) told him he should always ask that. Think again. My client chose to work with someone he determined was better rooted in reality.
So…don’t be afraid to acknowledge that you like a property. After all, you may be making an offer to purchase it; an act that is a pretty significant “show” of your cards. If you act excited and then don’t offer…well, that doesn’t harm you, and you’ve had a brief but fun time dreaming about the place. If you have reservations about the place, but are going to make an offer anyway…share those with your agent, and investigate during your diligence period (inspection, re-sale certificate review, etc.).