Posts Tagged ‘realtor’

Buyer Mentality vs. Lowball Reality

By Ed Gory | October 14th, 2010 1 Comment

Lowball offers rarely, if ever, get accepted.

There, I said it.

Almost everything you read in the news these days about the housing market points to it being a Buyer’s Market.  That is true to some extent, but not 100% of the time. There are neighborhoods out there that are exceptions to the rule, and often still get multiple offers (i.e. Palo Alto, Los Altos, parts of San Carlos & Redwood City).

But back to the notion of “lowball offers.” In my opinion, the success of a lowball offer is a bit of a myth.

From a SELLERS perspective

The current buyer mentality as a whole is fueled by what buyers read in the news, and the economic malaise in general. That mentality will not, I must repeat, will not change anytime soon.  So unless you’re selling a home in one of those rare “hot” neighborhoods, here’s the expectation you should have — buyers are going to come in and lowball you. Negotiating the best possible price is what I strive to do for my sellers every time (and I would think that nearly all listing agents have this fiduciary objective) — there’s no way I’d advise a seller to accept a lowball offer on the first round.  When buyers come into my listings and ask, “How low will they go?” my pat answer is, “Well, put something in writing and you’re sure to find out.”  Any good listing agent will not show their hand to how low their seller would go.

From a BUYER perspective

Now I’ll put my Buyer’s Agent hat on.

For a home that’s been on the market a LONG time (relatively speaking, of course), sure, the odds are that the home will sell for less than its asking price. How MUCH less really depends on the seller — since every seller’s situation is unique, I really don’t know “how low” they will go until I do a little further investigation with the sellers’ agent.  Even then, the sellers’ agent will rarely tell you exactly how low the sellers will go — that breaches his fiduciary duty to the sellers.  That agent’s duty is to get the home sold for the best possible price relative to all the other market conditions.

So, if you come in with a lowball offer (again, lowball being a relative term), the expectation you should ALWAYS have is that you’re going to get a counter-offer from the sellers.  Yes, sellers are “motivated,” but being motivated does NOT mean “desperate.”

Step 1: Make a lowball offer.   Step 2: Receive a counter offer from the seller.  It’s gonna happen, like it or not.

Look, here’s the reality: yes, buyers are generally in the driver’s seat these days, but, many sellers would rather wait it out, or take their home off the market before they accept a lowball offer.  Making a lowball offer, while it is a start to putting something in writing on the table, rarely meets with success.  Save your time and your efforts, and instead of getting your hopes up for getting “the deal of the century,” make a reasonable offer instead — the more fair/close-to-asking your offer price is, the less likely you are to get a counter-offer from the sellers.

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Intero Insider: Can I live here?

By Gino Blefari | June 1st, 2010 0 Comments

What are you really looking for when you decide to buy a home? Shelter, of course – a place you can call home that is comfortable, safe, and reflective of your own tastes.

And in that regard, looking for a home online can be pretty satisfying. There are hundreds, if not thousands, of websites displaying property listings today. Most of them give you basic information along with a few photos.

When you see one you like you might choose to move to the next step and contact a Realtor.

But what most buyers are looking for – and where most real estate websites fail – is an answer to a simple but important question:

Can I live here?

Answering that question requires something more than a list of properties for sale.

What you need is information that allows you to decide if the place in which a property exists meshes with the way you like to live life.

You may want to know:

Is there a good coffee house close by?

Are there day-care options near this property?

Is the elementary school within walking distance?

These are the things that get to the heart of the matter – the lifestyle factors that make a house a home.

We understand this at Intero and built technology to support this sort of decision. When you conduct a property search on Interorealestate.com you will see a clear list of properties (along with some very cool mapping tools) but you’ll also see a link on the left side of the page that says “schools, cafes, groceries and more.”

You can then choose from over two dozen types of amenities – from banks to restaurants – and display them on a map. 

Of course, the best way to truly understand a property and its neighborhood is to work closely with a good Realtor, but with this view you can get much closer to an answer to that all-important “Can I live here” question.

Happy searching!

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The Intero Insider: Missing Out On The Tax Credit Is OK. Really.

By Gino Blefari | April 27th, 2010 0 Comments

Ah, yes. The Homebuyer Tax Credit. It ranks right up there with health care reform and Eyjafjallajökull as the most-discussed news item of 2010. The proverbial dead horse has been beaten to a fare-thee-well, yet still keeps coming back for more.

The tax credit has, I think, driven many buyers who were on the fence about whether or not to purchase a home into the marketplace. It’s been something of a boon to those who have been able to take advantage of it. If you were able to qualify, that’s a great thing. $8000 (or $6500, if you were already a homeowner) is nothing at which to stick up one’s nose.

But is it, on its own, a reason to purchase a home? Absolutely not.

Everywhere I turn, I see advertisements, blog posts, and the like reminding people that the deadline for being able to claim the tax credit is rapidly approaching. To claim it, you must, in fact, be under contract by Friday, April 30, and you must be able to settle on that contract no later than June 30, 2010. At this point, however, any potential homebuyer who hasn’t been in the trenches and actively looking for a house — and looking seriously — should bide their time. They should not, under any circumstances, rush to sign a contract on a home by Friday, simply so they can claim an $8000 credit.

Why?

Because that $8000 isn’t worth the heartache and sleepless nights that will come with making a $300,000 mistake. Because of the pressure associated with meeting this deadline, lots of people are going to dive headlong into a decision that they’re not actually ready to make.

Any REALTOR worth his or her salt will stand up and say so. A good REALTOR — one who’s really looking out for his clients’ best interests — will not urge that decisions be made on a factor that, in the long run, won’t matter all that much.

And if you miss the credit? Don’t worry. The real estate market will, most likely, adjust once the credit expires. The bustling spring sales market will start to ebb. Sellers of real estate will have to consider absorbing some of the letdown, either by conceding some closing costs or, perhaps, agreeing to helping buyers buy points on their mortgages, or agreeing to other credits that will entice buyers to sign when the time is right.

A good REALTOR will understand these things and a good REALTOR will advise his clients of those options of which they might not have been aware.

So, yes. The Homebuyer Tax Credit was nice while it lasted. But don’t fret about having missed it. It’s OK. Really.

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Intero Insider: Ready To Buy A Home? Know The Expression: “Caveat Emptor”

By Gino Blefari | March 24th, 2010 0 Comments

Recently, while reading news items related to the real estate industry, I happened across a letter to the editor in which the writer, a recent homebuyer, referenced several problems she was having in her new home and wanted to know what recourse she had (if any) against the seller.

Her letter went on to say that she’d purchased the home “as is”; the sellers had had a home inspection performed and had provided a copy of the report. No significant problems found.

Huh.

I began to wonder if she —this recent homebuyer — had a buyer’s representative or whether she’d acted on her own behalf. I wondered if she’d ever heard the expression, “caveat emptor” or “let the buyer beware”.

With regard to this particular transaction, I don’t know any of the pertinent details, so I can’t really comment on those. But I do have lots to say about situations like this (and others like it). There are myriad situations that could have come into play in this case, but if the buyer really did purchase the home “as is”, then the onus, most likely, was on her to have her own home inspection performed, rather than take the one that the seller provided. Had she had a buyer’s representative, she would have known that a home inspection report is not a seller’s disclosure, nor is it a warranty of any kind.

Depending on the state in which you’re buying a home, “as is” condition may or may not come with any warranties or guarantees. In some states, for example, there are clauses in their real estate contracts that state that all major mechanical systems (plumbing, electrical systems, etc.) be in proper working order, regardless of the conditions of the home sale. In many, however, there are not.

Whether she likes it or not, and whether she realizes or not, she may very well have to face the fact that “as is” meant exactly that. Had she had a buyer’s representative — someone looking out for her interests instead of the seller’s — she would have known this.

If you listen, you’ll hear people say, over and over again, that buying a house is the most important financial decision you’ll ever make. Why would you make that decision without sound advice? The sellers of most homes have representatives working for them, why should you accept any less?

Buyers agents work for the buyer, not the seller. They have fiduciary duties to the buyer, and to no one else.

The buyer of the home in my example may or may not have any recourse. This is unfortunate, but it’s also reality.

Before you purchase a home, make sure that you’re protected. Make sure that you’ve got someone looking out for you. Otherwise, it’s “buyer beware”.

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