Posts

How Home Sellers Can Maximize Buyer Offers

Today’s market can be a difficult one for many sellers to navigate. While your real estate agent can advise you, the ultimate decision of what offer to accept is entirely up to you.

This decision can come with quite a bit of pressure. Even in the most favorable of markets this can be a difficult time. How do you know when to accept an offer?

maximize offers
Here are some questions to consider:

•  Is the buyer pre-qualified/approved? Selling will require an investment of time and money. You may need to find a new home or a temporary rental. There’s nothing worse than buying a new house only to find out the deal to sell yours has fallen through.

•  Do you need to move? The urgency of your move may dictate what offer you accept. Many sellers need to move quickly for a new job. You may need to sell to avoid foreclosure. If you are in a rush, you may need to accept an offer that is less than ideal.

•  How much do you owe? You don’t want to sell your home at a loss. And be sure to take closing costs into consideration. Many markets experienced high levels of depreciation over the last year. If you are underwater on your loan, now may not be the time to sell.

•  What is the market climate? Are you likely to get another offer? How long has your home been on the market? Have you had many showings? All of these are factors to consider when contemplating what offer to accept.

Above all, ask yourself if this offer was a reasonable offer. There are buyers that may attempt to low ball you. They may see that your home has been on the market longer than your competition. They may know that it’s a strong buyers market. In response they offer a much smaller amount for your home than it is worth. You are not obligated to accept these low ball offers. However, if you are in need of selling now, every offer warrants consideration or a counter offer.
In the end, you must accept an offer that works for you. You may be willing to accept a lower amount in exchange for a faster closing date. Or you may wish to hold out for the highest dollar amount.

Written by Carla Hill, RealtyTimes

Buying Home Direct

Why Direct Deals Are Bad for the Seller?

Ooh, a direct deal. That’s when the home buyer is not represented by an agent so the listing agent works directly with the buyer. Every agent wants a direct deal so they can keep double the commission. And sellers like it because often, without a co-broke, the commission will be cut (say from 5% to 4%).

Buying Home DirectListing agent makes more money while seller pays less commission, so what is the problem?

I don’t like direct deals and I think they are a rotten situation for sellers!

This unconventional piece of wisdom comes from years of experience, and has recently been reenforced during a condo sale.

At an open house I hosted two weeks ago a buyer came to me and wanted to write the offer directly with me. The next day We met, sat down, wrote the offer….well, most of it.

First, by law, I had to disclose to the buyer that I work for the seller. With this in mind, we started the money conversation.

Buyer wanted to offer well under the asking price. As I discuss the price with her, she listens, she nods, and she says (I paraphrase), “You work for the seller, why should I listen to you?”

As someone representing the seller, I do not have the authority to represent any price but the full asking price. I am not free to negotiate money which is not mine. Which is besides the fact I thought the asking price was reasonable.

As I asked her to sign the offer, she hesitates, “You know, maybe I should have my own agent review this.”

I asked her if she knew anyone, she does, she calls and books an appointment with this other agent immediately.

Two hours later, I received an offer from this buyer through her buyer’s agent. It was a much higher, much better offer. It reflected a buyer who understood the market and the process.

Seems to defy logic, that a buyer’s agent will write a much better offer than the seller’s agent?

The fact is, as long as my ficuciary obligation is to the seller, nothing I say to a buyer carries much weight. I may be giving excellent and honest advice, but none of it can be contrary to my clients best interests, or what they tell me to represent.

A buyer knows there is a choice to be represented, and once she is aware of the fact she is not, hesitation sets in. Buying a condo is a bit complex and expensive.

By seeking reprentation, the buyer agent is there through the whole transaction to explain everyting, and ensure the buyer understands it. The buyer receives advice congruent with her interests, and thus she is a more informed and eager.

Financially my client is ahead because the home buyer trusted her agent’s advice – a trust I can’t instill as someone representing the seller.

An educated, well represented buyer will make stronger offers, take the transaction more seriously, and is much more likely to close.

Isn’t that the goal?

Three Most Important Contingencies When Buying a Condo

Are you working with a Realtor on your home purchase in Boston? I certainly hope so!  If you are going at it alone, you may overlook the most important contingencies when buying a condo.  In Massachusetts there are two contingencies written into the offer to purchase paperwork.  But what’s not in the standard offer is the most important when buying a condo.  Row of brick houses in Boston

Here are the three contingencies you must have in your offer to buy a condo:

1. Inspection Contingency.  Conduct an inspection with a licensed inspector who comes highly recommended.  You will have 7-10 days (including weekends) to conduct this inspection. Ensure you receive the report in a timely manner, and if you need more time, file for an contingency extension.

2. Financing / Mortgage Contingency.  Unless you are paying cash, you will probably have a mortgage contingency in your offer.  The standard paperwork has it built into the offer.  Usually, roughly a month to six weeks after the offer is accepted.  If you are closing quickly, you’ll have to get it done sooner.  Don’t forget to submit your completed mortgage application in accordance with the deadline in the offer.  If you read carefully through the paperwork, you’ll find the buyer’s obligation to file an application by a specified day.  If not done on time you jeopardize the validity of the mortgage contingency.

3. Condominium Documents Review.  Although not included in the standard paperwork, the condo document review is in my opinion the most important contingency when buying a condo.  It allows you time to read through the condominium documents and financial statements, and pass them on to your attorney to look for anything out of the ordinary.

Why is this so important?  You will learn about the financial health of the building, rules and regulations, and a lot more detail about how the condo association functions.      If the building is in a dismal financial situation and poorly run, expect the value of the condo to deteriorate or the association to have large expenses in the near term.  Furthermore, the mortgage company may reject your application if the building has low owner occupancy or lack of funds.

When including the condominium documents review contingency, don’t forget to specify the documents will be provided within two business days.  The listing broker should have them ready before the condo goes on market, so this should not be a problem.

Writing an offer to purchase a condo requires thought and preparation. Learn the contingencies and don’t depend on standard paperwork alone to protect your interests.

 

buying a home

Three Signs Your Buyer Agent is Not Very Good

Stop your home search, start your buyer agent search!  If you are not getting results, find a better agent.

In the seller’s market, working with a hard working competent buyers agent is necessary in order to buy a property at the right price.

buying a home

Is Your Real Estate Agent Asleep At The Wheel?

Yet many buyers are failing at securing a home, and buyers are getting caught up in the stressful and intense market.

Here are three signs your buyers agent may not be your ideal advocate, and perhaps it’s time to switch.

1. Your agent is waiting to see what comes up on MLS.  If this is the only strategy employed to find a home, that’s not enough in the hot real estate markets such as Brookline and Newton.  Whether working with property investors or home buyers, a buyer’s agent can do other things to look for the right property, including networking and sending mailings to neighborhoods.

2. Your agent is not asking hard questions.  Your agent should ask you questions that force you to examine your price range, timing and every possible angle of the home buying decisions.  An experienced agent knows buyers don’t always buy what they say they will.  Such an agent thinks outside the criteria you have, finding alternatives, and presenting options and possibilities.

3. Your agent does not prepare you for the market and set expectations.  You should know what to expect when you are ready to make an offer, and be prepared for rejections.  When you choose a home you like is NOT the time for your primary real estate education.  You must be ready to go.  Finding the right home is the last step of the home search process, not the first.

Don’t get stuck with a buyers agent who isn’t servicing you.  If buying a home is important, do it right or expect it will go terribly wrong.

Buying Home in Seller's Market

Top FIVE Considerations When Buying a Home in a Seller’s Market

Are you trying to buy a home and failing miserably? Is the housing marketed giving you a kick in the butt?  Thinking of obvious things in a new way may help.

Buying Home in Seller's Market

This summer I am hearing from many people who are desperately trying to buy a home, yet every new home on the market is grabbed by someone else.  Buyers are tired and frustrated, feeling defeated.

It’s a tough market out there for buyers, no doubt.  In home buying, as in every successful endeavor, you must have a goal, a plan and system to execute your plan.  If you don’t change the way you are doing things, you won’t change the outcome.  What system have you been using to secure your new home?

There are several considerations where you need to review your approach, and perhaps find a new way to go about things.  Examine each of the following variables.

Buyers Agent.  In a seller’s market, you need a buyers’ agent.  Hire a good buyer agent you like and trust.  Someone who will advocate on your behalf, who’ll help keep you sane, and who will give you sound advice.

If the best advice you’ve received so far has been to pay more money, you are getting short changed.  Perhaps it’s time to switch.   It is okay to move on!  The best agents lose clients sometimes.  We can’t all be experts on the same markets, in the same situations and the best choice for everyone.  Find the person who’s best suited for you.

Price Range.  Are you looking in the right price range?  There are two ways to look at this question.  If you are looking at properties that are priced in your range, but sell for more, then you are really looking at a higher range you can afford.  Adjust the search for a bit less, and offer a bit more.  Stop expecting the market to stop for you.

Alternatively, are you sure you are looking for as much as you can afford?  A good mortgage broker will show you options in how to pay for your home, and you may be able to stretch further.  Please note, I advocate buyers only BUY WHAT YOU CAN AFFORD.  My point is to speak with a great mortgage broker to get your financial house in order first, and to know your affordability.

Clean Offers.  When making an offer, remember it’s not only about the money.  You can find ways to please the seller with fewer conditions or working around her schedule. Be flexible, and put your best foot forward.  Knowing when you don’t have the upper hand is important, stop fighting it.

Recently my buyers made an offer on a house in Arlington with the sellers’ ideal timing.  It is not convenient for my buyers, but they are making it work, while the seller is happily cooperating on every other part of the sale.

Furthermore, the seller will want to work with someone who is easy and pleasant.  Keep your neurosis to yourself.  Neurosis can be apparent in buyer agent behavior, the conditions in the offer, and your endless list of questions.  I say this with the greatest respect to all the neurotics out there, as I am one of you!

Stop the Insanity! You don’t have to get caught up in the insanity of the market.  The right place will come at the right time, and believe it will happen.  As a Realtor, I witness a lot of nutty behavior: Offers which do not reflect value, and buyers getting themselves into risky situations.  I don’t like my buyers in these situations, and try to steer them in the direction of good sense.

One way to avoid some of the insanity is to focus on stale inventory.  Some properties which go on market do not sell, and it is mostly because they are overpriced.  Go take a look at properties sitting on market – maybe you can make it work?  Maybe you will have some leverage as the only buyer in the mix?  You may even get a good deal!!!

Tip: Go take a look at all the stale inventory which roughly meets your criteria, plus take a look in another community if you can.  Widen the horizons, you may be surprised.

Don’t Buy.  Maybe it’s not your year to buy.  If you are selling your home and buying, unless you must move, then you should be in no hurry.  If you are renting, even thought rents are up, you could be better off staying put. Sure, rates are low, prices will likely continue to climb, yada yada yada.  A real estate agent can always tell you why you should buy NOW.  But maybe next year will be a better.

Critically review the way in which you have been going about your home search.  Try changing some aspects of it.  Remember, you must change your method if you want to change the results.

boston real estate

Buying Your First Home This Fall? Your First Three Must-Do Tasks

boston real estate Boston real estate agents are making their way back from the Cape getting ready to put up some For Sale signs.  The Fall real estate market is here.  According to Realtors, it officially begins the day after Labor Day.  The general expectation is for a vibrant, busy and tight real estate market in Brookline, Boston and Newton in the coming months.

First time home buyers lead the market, and more them are taking the plunge.   Going about it correctly will make the difference between a good or bad investment, a positive or negative experience.  If you are considering making this fall market your opportunity to buy, here are your three must-do tasks.  Do these three things, and you’ll be well positioned in the busy market.

  1. Hire a buyer’s agent.  There are many ways to find an buyer’s agent, and trust me; there are a lot of us.  You can ask a friend for a recommendation, meet agents at open houses or call on some advertising.  But whatever you do, hire someone after a thorough interview and once you’ve made a genuine connection.  It is more important you work with an agent you feel understands your needs and respects your pace, rather than your friends’ recommendation for his cousin’s neighbor’s mom.
  2. Get Pre-Approved!  A pre-qualification does not count.  Speak with a human mortgage broker (rather than simple online forms), and learn what you need to do to finance a home.  Once you speak with a professional and knowledgeable mortgage broker, you’ll be much wiser.  Furthermore, having a pre-approval in hand is a solid foundation for making offers.  Don’t guess how much you can spend and hope to get everything done later.  It doesn’t work.
  3. Prepare for a big change in your life.  I’ve worked with many first time home buyers over the past ten years.  Buying your first home is a time of great change.  And although it is a change for the better, the task can be daunting.  Break it down to small pieces.  Focus on each stage of the home buying process, such as looking at homes, or inspection.  If you’ve done task one and two, the whole process will feel manageable, and you will have a team working with you to make it all happen.

If you are ready to take advantage of low mortgage rates and a rising real estate market, buying your first home can prove a terrific investment.  Take a deep breath, and say hello to the Boston real estate.

Buyer Agency Contract

The Risks of an Exclusive Buyer Agency Contract

first time home buyerFinally buyer agency contracts are becoming more popular in Greater Boston.  As a first time home buyer in Boston you should be especially interested in signing a buyer agency contract.  Boston, Newton, and Brookline Realtors are usually happy to discuss the contract and demonstrate how it protects you.

The goal of a buyer agency contract is to cement a relationship between broker and buyer for a set period of time.  The broker is obligated to meet fiduciary responsibilities to the buyer, which essential means the buyer’s interests and instructions always trump the broker’s interests and advice.

Like in any contract, there are risks and benefits to both the agent and the buyer.  Let’s clarify what they are so you can judge if you need the buyer agency when you buy a home.

Risks to Buyer

To the buyer, there are two main risks.  First, the buyer is obligated to work exclusively with the buyer agent for a set period of time, as outlined in the contract.  But what happens after a couple of months the agent proves unhelpful or a bad match?

This risk can mostly be averted by interviewing agents and asking for referrals.  Some agents happily work with you for a bit to ensure there is a good match between broker and buyer.

The second risk to the home buyer is the possibility of an added cost.  But, that’s not really the case – it only seems like a risk.  The prices of homes almost always include the buyer agent’s commission.   Most For-Sale-By-Owner homes pay a buyer agency commission.

What about a listing with a discount commission.  Say you are a first time home buyer in Boston and you are looking at small condos.  Some of them may have a commission paid to buyer’s agent of 2%, and your contract is for 2.5%.  Where is the missing 0.5% coming from?

You can build the added commission into the offer price and it can still come out of the seller’s final price.  Alternatively, you can pay the balance at the closing yourself remembering sellers who discount commission usually negotiate badly – meaning, you probably have a decent deal on your hands!

Risks to Broker

The broker also takes risks in these contracts.  First, just as the buyers, we may not want to spend six or twelve months committed to you.  Sometimes agents don’t like their clients, and fat chance we’ll get referrals from a client’s accountant / attorney / financial planner / parents to learn if you are reasonable.

But the guarantee of getting paid has brokers working a bit harder for clients and more committed to the process regardless of how unreasonable.

The other risk we have, and the biggest of all risks, is somehow failing to meet all the obligations spelled out in the contract.  We can’t miss a house!  This is especially daunting in a very tight market where everything sells so quickly.

Every obligation and task on the contract is a potential lawsuit if not done correctly.  The buyer agency contract carries a huge responsibility for the broker.  This is not a bad thing, but it is important to point out.

The Benefits

Signing a contract awards the buyer benefits of fiduciary obligation and commitment from the broker.  You have someone working for you, no need to ponder the agent’s agenda.  As a serious buyer you want to hire a buyer agent so you are guaranteed a level of service, which you deserve.

The broker benefits from the guaranteed income if he should successfully sell a home.  It is very frustrating for agents to work for buyers only to find they walked into an open house and bought a home direct from the listing agent.

We don’t get paid if you don’t buy, but if you do buy, we want to get paid. The buyer agency contract guarantees the buyer receives services in return.  This begs the buyers to consider their agents more carefully, which is a very good thing.

Buyers often mistakenly think the buyer agency contract was developed to protect agents, when the buyer is the one who has most to gain.

Today’s Home Selling: Listing Agents as SEO Expert

Selling a home used toListing Agent Finding Buyer be characterized by three activities: putting up a yard sign, hosting an open house, and advertising in the paper.  Some agents did this extremely well.  If selling your home was that simple, no wonder so many people chose to sell homes by themselves.

These days, selling your home is a lot more complex and requires a new level of sophistication.  Listing agents need to be search engine optimizing (SEO) experts.  Most agents don’t understand this yet.  Brookline Realtors, Newton MA real estate agents, and Boston real estate in general often lag behind in these matters.

According to the National Association of Realtors, 88% of buyers use the internet in their home search, and I bet that number is even higher in the Greater Boston Area.  Where else would you begin any search for anything? When you are finding answers to your queries, it means someone has taken the time to put content together and optimize for you to find.

Home searches are not just beginning online, but they continue online as well.   Buyers don’t stop their search as they get closer to finding their home.  Photos, floor plans, videos and information is reviewed and used to make shorter lists of homes to see.  Online home profiles are used to compare and contrast homes and to make final decisions as well.

If this is how buyers choose to consume information, it is the listing brokers’ responsibility to feed that information accordingly.  A successful online marketing strategy for a home has two functions.  First, to be found by as many targeted buyers as possible.  To be easily found is great, but quality trumps quantity.  I would rather have five visitors to the home who are qualified, ready to buy, and are the right fit for the home than 25 visitors who are browsing and curious.

The second function of a successful online marketing strategy for a home is appeal.  Your home needs to look amazing online.  Professional photos, floor plans, complete information, and a video all help.  More than ever the preparation for a home sale is important so the photographs and videos inspire the buyer to schedule an appointment.

Incomplete information may have been acceptable in the days when the buyer’s agent was the gatekeeper of information, but no more.  Any listing agent who’s marketing plan focuses on open houses, yard signs, and advertising is missing the point, and a good chunk of good buyers for your home.

How did you find your home?  How long ago was that?

negotiate home price

Stupid Mistakes Home Buyers Make

negotiate home priceThere are many multiple-offer situations these days, especially in Newton and Brighton.  I heard of a buyer who put bids on four properties before giving-up and renting.  Despite the stories, I still believe the biggest mistakes buyers make are rooted in the fear of losing a property.

Fear based decisions are usually wrong.  In buying real estate, fear results in heart ache and overpaying.  When a buyer fears losing a home she will offer too much money, overlook important inspection items, or not pay attention to the condominium documents or a building’s financial condition.

A careless broker will allow for this without regard.  Even if the initial offer is for a reasonable price, the negotiations will be weak resulting in accommodating the seller excessively.  Negotiating can be stressful and emotional, the best time to lose a sense of reality and get overly attached to a property.

Then comes inspection, where expensive issues come up.  In fear of losing the property, the buyer will accept the home as it is or under negotiate.  For major issues, the buyer should bring in professionals who can quote necessary repairs.  A buyer’s agent understanding fiduciary responsibility will encourage this, and encourage the buyer to disregard a disgruntled seller.

A nervous buyer may skim the purchase and sale contract, and not request an explanation of the parts from the attorney.  Buyers must not be shy about asking the attorney to take the time to review the pieces of this 7-14 page contract.  All remaining contingencies and the buyer’s pre-closing responsibilities are to be thoroughly understood.

Sometime between 24 to 1 hour before the closing there will be a walk-through the property to ensure it was left in broom-clean condition and any inspection issues were properly fixed.  If you think this is simply a formality, think again!  My own walk-through was a disaster, with the condo left a mess and still needing to have items removed.  A few of my buyers found the property in unacceptable condition before closing.

There are ways to deal with this problem, too.  Money paid back to buyer or held back in escrow are two options.  The buyer has the right to demand seller pay for the property to be vacated and cleaned, regardless of how desirable the property and how many offers competed for it.

So don’t fear losing a property.  You’ll be a much better negotiator if you remember this important truth: There will be another home.