Sellers Don’t Be Offended By A Low Offer On Your Home

Do Not Take A Low Offer On Your Home Personal (even though it seems like it is)

Consider before you ignore or outright refuse a very low purchase offer for your home. A counteroffer and negotiation could turn that low purchase offer into a sale.

A purchase offer, even a very low one, means someone wants to purchase your home. It deserves an answer even if it is a rejection. Your Real Estate Agent can advise the best way to respond to an offer you definitely do not want to accept.
Depending on your competition, how long  your house has been on the market and your motivation to move, you should counter the offer with the price and terms that are acceptable to you. Buyer’s want to try and see what they can get, how low they can go. Also, keep in mind in many cultures negotiating is how they do business.

A counteroffer signals that you’re willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as seller assistance with closing costs, or features such as kitchen appliances that you’d like to take with you.

Consider the terms

Price is paramount for most buyers and sellers, but it’s not the only deal point. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, and the buyer is preapproved for a mortgage. Consider what terms you might change in a counteroffer to make the deal work.

Review your comps

Ask your REALTOR® whether any homes that are comparable to yours (known as “comps”) have been sold or put on the market since your home was listed for sale. If those new comps are at lower prices, you might have to lower your price to match them if you want to sell.

Consider the buyer’s comps

Buyers sometimes attach comps to a low offer to try to convince the seller to accept a lower purchase offer. Take a look at those comps. Are the homes similar to yours? If so, your asking price might be unrealistic. If not, you might want to include in your counteroffer information about those homes and your own comps that justify your asking price.

If the purchase offer is too low to counter, but you don’t have a better option, ask your real estate agent to call the buyer’s agent and try to narrow the price gap so that a counteroffer would make sense. Also, ask your real estate agent whether the buyer (or buyer’s agent) has a reputation for lowball purchase offers. If that’s the case, you might feel freer to reject the offer.
Buyers are sensitive to signs that a seller may be receptive to a low purchase offer. If your home is vacant or your home’s listing describes you as a “motivated” seller, you may be communicating that you will accept a low offer.

If you can remedy the situation, maybe by renting furniture or asking your agent not to mention in your home listing that you’re motivated, the next purchase offer you get might be more to your liking.

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How Do I Determine the Right Price to Sell My House

Determining the right price to sell your home is not magic. If you understand the concept of supply and demand, then you will realize that the “market” determines the value of your home. You as the seller must be able to objectively (this is very hard as a seller – who in most cases believes their house is the best one on the street) look at the market.

Homes Priced Right Sell Faster

If there are houses on your street, similar in size and condition the price that these homes sold for is your indication. You do not want to overprice your home, only to have no one show it because the other homes in the area are priced lower. What happens in this scenario is that you will find yourself chasing the market, rather than leading the market.

The Market Determines the Right Price For Your Home

Realtor’s don’t determine market value they interpret it, based on the available data. In a slow market, buyers actually determine the market. In a slow market you are competing with every other seller to get that buyer to purchase your home. As much as it pains us to hear this, buyers really don’t care what you paid for the house, how much you have invested in upgrades, or your financial situation.

If you are serious about selling in the shortest time frame, then it is crucial that you price the home appropriately. Your real estate agent can help you determine the right price by providing you with data that shows houses currently on the market and houses that have sold within the last 3 months. The question to ask yourself is “are you in the market or do you want to be on the market”.

Watch the video below to better understand being on the market or in the market.

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What The Smart Seller Does

Selling one’s home is emotional for all involved. Getting the house ready takes time and in some instances money. Prior to putting the house on the market I suggest to my clients that they are proactive rather than reactive. By this I mean there are things that they have control of prior to listing the home and in most cases spend less time and money if addressed before the listing.

  1. Paint – interior and exterior if required. A touch up may be all that is needed. Neutral colors work best. Purple walls may have delighted your children, but they can be a turn off to a prospective buyer.
  2. Repair any holes in the walls.
  3. Make sure the plumbing is working properly – fix leaky faucets, toilets, etc.
  4. Get an inspection for your heating and air conditioning systems.
  5. Make sure all appliances are in working order (and be sure to clean the oven)
  6. Out dated or dirty carpets – replace or clean. Again neutral colors always work best.
  7. Clean up the yard
  8. Make sure the entry to your house is appealing – remove all the dust bunnies (as I refer to them)
  9. Get a termite inspection. Almost any buyer will have this done prior to buying a house and some lenders require this. The importance of doing this before listing your house – of there are termites and repairs are required – you may be able to save money.You will still need to have the proper repairs completed and certified, but you have the option of selecting the contractors, etc.
  10. Subscribe to a home warranty. This will protect you during the listing period from items breaking down or small repairs that need to be accomplished. Generally depending on the company issuing the warranty, you will not be charged until closing. No closing no charges. This is not a hard decision to make. Your real estate agent can help you with selecting a home warranty company.

My big tip (well maybe not so big). Get in your car, drive around the block – park in front of your house and look at it objectively. Take all emotions out. Look through the eyes of a “would be” buyer. Walk up to the front door, and again look around as if you are not the owner but a prospective buyer. This is hard, you love your house, there are memories, but the question  you need to ask “do I want to sell this house and how serious am I”? When you can answer that question objectively, you are ready to move on.

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Sellers Closing Costs

This is a list of the typical closing costs associated with selling a home. Counties vary for title insurance, and transfer sales tax, so be sure to check with your escrow company to determine if the buyer or the seller pays for the title insurance.

  • Real Estate Commission
  • Documentation preparation
  • Deed Document recording fee
  • County Transfer Tax
  • Loan fees required by the buyer’s lender
  • Notary Fees
  • Any city transfer/conveyance tax
  • Special courier/delivery fees
  • Payoff of all loans in the sellers name
  • Interest accrued to the old lender
  • Lender payoff fees
  • Homeowner’s Association transfer fee
  • Prorated share of homeowners dues
  • Bonds or assessments (per the sales contract)
  • Termite inspection and Section I repairs
  • Natural Hazards Disclosure report
  • Home warranty
  • Any delinquent taxes
  • Any judgment, tax liens, etc. against the seller
  • Prorated share of the property taxes
  • Recording charges to clear all documents of record against the seller

Since closing costs vary from one location to the next, such as title insurance (Southern CA seller pays, Northern CA buyer pays)please be sure to check with a real estate agent.

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Selling Your Home Fast

Sell Your Home FastWe all know that buying or selling a home can be a time consuming process. Although there are thousands of people looking to buy homes, it can be a tricky process finding the right person interested in your home. With hundreds of homes for sale in many areas, you will have competition and to stay ahead of your competition the 3 most important items to consider (and in this order):

1. Price

2. Location

3. Condition

Pricing your home correctly is critical. Stay ahead of the market – don’t follow-it as you put yourself in the position of following it down. The first 30 days are key. If you price your home above other comparable homes in your area, you will not only turn the buyers off, Realtors won’t show the property. Buyer’s do not care how much you paid for the house, any improvements you did and the costs. They want to be sure they are not paying above market value.

Location another critical factor. The saying always used to be “location, location, location” and that is still true to some degree. If your home is located next to a freeway no matter how big or beautiful it is, the demand for this property will be much lower than a similar home in a nice quiet neighborhood. Aggressively priced below market may be very attractive to someone who does not care about the noise.

The condition of your house is what creates the first impression. The house may be right in line with market values and maybe perhaps a bit below, but if the home needs a lot of work or appears to need work, if you get any interest the offers will reflect what a buyer believes his out of pocket costs will be to make repairs. Do the repairs before listing the house if possible and if you can’t you can credit the buyer a reasonable amount of money at the close of escrow to complete the repairs.

Make sure that the exterior is clean, the lawn is trim, and the interior is in superb condition. If you plan to live there until it is sold, you’ll want to make sure that you have the interior staged as best as you can. More and more sellers are utilizing the services of professional stagers to help them get the house visually appealing to anyone who walks through the front door. You want to give the buyer a great feeling, so he’ll stay and won’t leave.

Basically everything comes down to price and perceived value. Concessions for location, condition and market factors need to be assessed when determining the right price to get a contract.

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