Category: Agent

Thinking about putting in an offer? 

by HOMEiZ Blog Team Posted: 08/19/2016 Views: 954

Real Estate Agents know they need to spend a fair bit of time with a buyer, especially ones who want to look at a lot of properties. Some buyers have unrealistic expectation and that can be a waste of time for the agent. Finally, you found the property you like and you are thinking about putting in an offer. But before you are putting in an offer you want to consult your agent and listen to what he/she has to say. After all the agent has lots of experience and knows the area inside out. The other big benefit is, agents have access to sale price information for similar properties and can compare between sold properties to the subject property.

Can I trust my Agent?

Most real estate agents get pay only when escrow is closed and not before. So there will be many real estate agents who will want to rush the process and get the deal done as fast as possible. You as a buyer should avoid dealing with these types of agents! They can lead you to make mistakes that will cost you thousands of dollars. Most of these types of agents will likely say to you the followings:

Don’t bid too low or you will offend the sellers. So what you should do as a buyer? The answer is to submit your offer regardless.
You should get a bid in quickly before someone else puts a bid in. So what you should do as a buyer? Take your time and do not rush!
Another buyer was looking at the house and he/she is really interested. So what you should do as a buyer? You must take the chance and act as you feel. You win or lose the property.

Fortunately, there are many good reliable real estate agents who you can trust. Work with these agents who will show they really care for you, the once who really negotiate hard and take the time to get you the best deal possible. There are many real estate agents who are very professional and have great negotiation skills to give you the best service you deserve.

How much below should you offer?

The actual definition of market value is "The price that a buyer is willing to pay for a property, and that the seller is willing to accept". So, just because you have determined a property is worth a certain price doesn't mean the Seller will accept it. Ideally, you would like to get the property for below market value, but in reality, you just want to get it for the best price you can. So you will determine what a good starting point would be. Again, this all depends on the individual property, and whether there are any other offers competing with you. There is no set rule-of-thumb for determining how much under the list price a property is really worth. Your buyer agent can look up how much of a mortgage the seller took out on the property (sometimes 2 mortgages), and calculate approximately what amount is still owed. From there your buyer agent will look up comparable properties in the same neighborhood that have recently sold - usually in the last 3-6 months, depending on the market. Another method is to take the price that the current seller paid for the property, and add on the percentage that real estate prices have increased or decreased since that time. With this information, your Buyer Agent can calculate the approximate current value, though in most cases this is not an exact science.

A Binding offer or Letter of intent?

When you think you’ve found your dream home, you might be tempted to make an offer and sign on the dotted line as soon as possible – but buyer beware! Once you make an offer, you can’t change it once the seller accepts it. Even if your offer is accepted with conditions, you can’t change it unilaterally. You must remember, if only one side wants to terminate, it is very difficult to force the other side to cancel. A Binding purchase offer can bind both you and the seller. Whether it's called a contract-to-purchase, an offer, binder, or earnest-money agreement, you can be held to your offer once it's signed by the seller. If you leave anything out and the seller accepts and signs the contract, you're out of luck. That's why you must include every minute detail and aspect of the purchase and sale. Many savvy buyers do not use a binding offer until all sale and purchase details are met and agreed between the buyer and the seller. They use Letter of intent. A letter of intent can be binding as well depends on the language used to put it together, however most letters of intent are not binding and they are great to use as a starting point with your offer. Once there is an agreement between the seller and the buyer on the terms and conditions only then a purchase and sale agreement can be drafted read to be signed to be binding.

Why is Negotiation So Important?

By the time you’re ready to make an offer, you should have done your homework (Due Diligence). It is easy to get carried away by emotion and allow the seller to box you into a price that is above what you’ve decided. If you have chosen your agent well, this won’t happen. Nevertheless, bad agents have been known to urge clients to accept counter-offers simply so they can stop working on the negotiation. You must be firm. You and your agent need to make sellers believe that if they want to sell their home to you, they’re the ones who need to get with the program. If you are making an offer in the evening, make the expiration early the next afternoon. Why? Having a longer period just invites a competing offer, exactly what you do not want. Don’t give the seller’s agent a chance to round up someone else. If the seller seems emotionally tied to a certain price, instead of asking the seller to lower their asking price, ask for certain concessions, such as repairs, or that the owner contribute to the closing costs. A good well experienced real estate agents have the skills to negotiate. Let your agent do the talk and to negotiate the deal for you.

By HOMEiZ Blog Team