home buyer tips kitsap washington :: SoundBiteBlog.com

This is the 3rd and final installment in a series entitled “The Art of Offering Less” and deals with the unique nuances associated with tendering an offer that is lower than the asking price.

In the 1st article we discussed the market dynamics that tend to encourage or breed low offers.

In the 2nd article, we shared various strategies for Buyers to achieve success with low offers.

In this final part, we’ll talk about the risks that are inherent with making low offers.

Obviously, the biggest risk you run in offering less is leaving the door of opportunity open for another Buyer to come along and rain on your parade. By this I mean, that while you and the Sellers are negotiating the price, and countering back and forth, another Buyer can come along and offer something more attractive. This effectively puts you in a defensive posture, and usually results in you having to sweeten your offer. As a result, you typically end up paying out way more money than you would have if you had simply offered a reasonable amount in the first place.

Therein lies the true secret of writing a low offer – determining that ‘magical’ initial price that doesn’t insult the Sellers, but yet is still within reason so that it attracts their interests and serious considerations.

As a Listing Agent, I always counsel my Sellers to consider each and every offer as a serious offer, regardless of whether it’s low or not. Unfortunately, not all Sellers are properly represented or counseled. As such, there are those who take low offers as a personal insult and refuse to respond back to the Buyers. At the very least, you should always counter back to an amount you feel is more reasonable.

Just because the market has slowed and the inventory of available homes has increased, don’t assume that every Seller is desperate and willing to consider a lowball offer. Many Listing Agents are now counseling their Sellers to price their homes very aggressively right out of the gate in order to effectively compete against short sales and foreclosures. Be sure to work with a Buyer’s Agent who has an intimate knowledge and understanding of your local market, and can provide you with accurate comparative analysis/justification for home valuations.

~     o     ~     o     ~     o     ~     o     ~     o     ~

Rich Jacobson is a licensed real estate professional providing knowledgeable empowerment and relentless representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLife.com and Crabbing in the Hood, or e-mail:  kitsapagent@gmail.com

Share on Facebook

Posted in Buyers, Real Estate Bites, Sellers | 6 Comments »

Tags: buyers market, home buyer tips kitsap washington, Kitsap County WA real estate, making a low offer, Silverdale WA Real Estate

Purchasing a home without representation is similar to driving down a straight road with a blindfold on. It might work out.

The process of purchasing real estate is pretty straight-forward, but the complexities of the legal paperwork are intimidating to say the least. Quite honestly, I wouldn’t think of doing this and I work with real estate transactions every day of the week! There is no better investment of my money, than the services of a well-trained and experienced Realtor®. 

If you have decided to do-it-yourself, here are three things to help you maintain some control of the transaction. These three contigencies will allow you some protection from the more common problems that arise between the time you find the home of your dreams, and the time you are handed the keys to it.

Stay In Control – Tip #1

Financing Contingency:  You want to insure that the financing happens the way that you need it to.  For example, you may want to place an offer based on  finding a mortgage with your specific terms. If you have decided that 6.50% is the highest interest rate you are willing to pay, yet 8.00% is the lowest available at the time, you will need a way to back out of the transaction without financial penalty.  If you do not find that mortgage, the deposit that you have made will be refunded to you. 

The best course of action is to have your financing in place before you go shopping. In that case you can still add a contingency for a specific time period in which to formalize you financing. 

Stay In Control – Tip #2
 

Inspection Contingency:  The next thing to insure your protection is a  home inspection contingency.  Because homes are such large investments and an emotional decision, you need to have your home professionally inspected.  This is no time to put your weekend-garage-warrior hat on thinking you can save a couple of hundred bucks. Let the professionals climb around in the attic and into the crawlspace. Listen to the inspector if he recommends calling in a licensed electrician because some seems amiss. And make sure you place a contingency in your offer that the inspections come back clean or the offer is voided.  If the home inspector does find any problems with your home, you can decide to back out of the home’s purchase altogether, or you can renegotiate for a lower price, based on the findings.
You should have a professional company come in and look at all of the major systems in the home including your heating, cooking, roof, windows and so on.  In addition, the home’s structure should be considered, the presence of any potential electrical, plumbing, water damage or pests in the home and much more. 

Stay In Control – Tip #3 

Appraisal Contingency: While many home buyers are willing to pay for the home of their dreams no matter what that cost, the bank that is giving you the loan for it is not likely be so nice about the process.  The lender will require that an appraisal be done on the home, and you should too.  You want to know that you are getting a home that is worth the cost you are paying for it.  You should place a contingency in your offer, then, that the home will appraise for at least the amount of the offer you are placing.

You will need to have an independent appraiser come out and do this work.  He or she will compare the home’s condition and property aspects to homes in the area that have the same or similar features and what their selling prices have been. If the appraisal comes in low, make sure you have the legal right to back out of the transaction or renegotiate the price.

If you are determined to play Russian Roulette with hundreds of thousands of dollars by representing yourself in the purchase of a home, at least take along some Kevlar. These three contingencies will give you a bare minimum of protection.

Share on Facebook

Posted in Buyers, Miscellaneous, Real Estate Bites | 4 Comments »

Tags: home buyer tips kitsap washington, kitsap real estate blog, seattle real estate blog