One Small Step for a Seller... One Frightening Leap for The Buyer!!!

            There are a lot of things in this world that are intimidating.  Your first foray into the stock market or your first public speaking engagement and surgery for example can be pretty unnerving.

            Then, there are the things in life that are downright frightening – like finding a snake in your bathtub or re-wiring your own home. Scary in different way, maybe, but either of these can lead to a 9-1-1 call. 

            There’s not a lot we can do about snakes.  Snakes happen.  But unless you’re an engineer or an electrician, you’d better leave the electricity to the experts.  

            If you’re considering buying a house, one of the most unnerving and intimidating parts of the process is the actual offer.  How much is enough?  How much is too little?  How does the price of this house fit into the prices of the other houses in this neighborhood? 

            Location, location, location is really important, but paying too much for a house in a great location is not what anyone wants to do.

            On the other side, if you’re the seller, you have the same problem in reverse.  You don’t want to sell for too little, but you also don’t want to overprice your home.  Overpricing is the quickest way to a house that sets records for most days on the market.

            This is not an award you want to receive.

But, I Don’t Know What to Do!

           

            Researchers say that stress is caused by a situation that is out of our control.  In addition, our sense of stress is only magnified by situations where we don’t know what to do.

            Enter the real estate negotiation. Sellers have no control over what a buyer will offer, buyers have no control over what a seller will accept. 

            And no one knows what to do. Or even what the rules are.

            Though life would be simpler if there were some hard and fast rules for negotiating, unfortunately, there just aren’t.  There are, however, some guidelines that will be helpful when you’re deciding what to offer on a house.  Or deciding how to counteroffer.

Information is King

           

            Let’s start with the offer.  If you’re working with a Realtor, take advantage of all he/she has to offer.  Although a Realtor, depending on agency laws in your state, could make recommendations, it is your money.  Only you know how you want to spend it. 

            If you haven’t already received it, have your agent run you the comparable sales in the neighborhood. These constitute the best way to determine what you’ll eventually pay for your new house.  The information you’ll receive is some of the precise information an appraiser will use to determine value for your lender.

            It’s true that every buyer is looking for a “deal”.  At the same time, every seller is looking to make the most out of their home. 

            Don’t forget this.  To you, it’s a great house or you wouldn't be making an offer.  But that great house is the seller’s home.  Maybe their children have grown up there.  Maybe, it’s the place they've gathered around the tree on Christmas mornings. Their memories have happened there. 

            When you’re deciding what to offer for a house, don’t forget there’s a sentimental attachment on the seller’s side.  Ignore that sentiment and you might offer so low, the seller is insulted.  When that happens, you’ll watch your “deal” fly out the window. 

            And you could be looking for another option.

And In This Corner…  

            Information is still king. A look at what houses have sold for in your neighborhood will tell you approximately what to expect when you’re listing your home.

            It’s hard to look at things from the buyer’s side, but it’s best to put aside your sentimentality and be practical.  Although you may love your home and you have no doubt paid attention to every detail, don’t forget an appraiser will be the final say in what your house is worth.  It won’t help if the buyers agree to pay full price and find out the bank won’t lend on it because it won’t appraise.

            A quick word about appraisers:  Some things that are a definite improvement to a home, such as landscaping or a new roof, don’t add one shiny dime to the appraised value.  Appraisers have guidelines that force them to concentrate on the structure itself, not any of the landscaping or even a pool.  You’d be shocked to learn how little value an appraiser places on a pool.  Even though it cost you thousands of dollars to install, you’ll only get a fraction of that on the appraisal. And new roofs are essential. Bft it already had a roof, right?

            There is an old adage that all Realtors know. Your first buyer is almost always your best buyer.   If your house has been on the market only a short time and you got an offer, be glad.  Be thrilled, even.  It’s tempting to think, “If I got this offer so quickly, someone will pay my full price.”  

            Maybe.  After several more months of showings.  

            Perhaps

            As your granddaddy probably said, “a bird in the hand is worth two in the bush”.  Especially, when you might have to wait six months for that second bird.

And The Winner Is…

           

            When the buyers have the right information, they’ll know what they should offer for a home. 

            The seller will already know what to expect because he did his homework before he listed.

            So who wins in a negotiation?  You do.

            And it wasn't scary at all.