Is there a mystery to real estate offers?
We all love to read a good mystery. John Grisham, Mickey Spillane and Sr. Arthur Conan Doyle have written intricate and page-turning stories, keeping us at the edge of our seats. But when it comes to either waiting for an offer on your property or waiting for an acceptance on an offer for a property you want to purchase, being in the middle of a mystery just isn’t fun.
Buying and selling real estate is always an emotional rollercoaster, but we’re all human and we all make mistakes in judgment sometimes driven by frenzy and greed. But if you follow a few simple rules and keep your emotions in check, you’ll come out ahead, whether you’re the buyer or the seller.
Sellers, especially in an escalating market, frequently make the mistake of pricing their property too high. With the level of super informed buyers in the marketplace today, it doesn’t take long for an overpriced home to wither on the vine. After a while, properties sitting too long become stale and they, therefore, get very little traffic through them.
For sale by owner listings are notoriously guilty of this. Not only do they think they can do it without a broker and save the commission, but they also expect to get top dollar. The general consensus is that if you’re priced appropriately you’ll get an offer in the first 30 days.
Believe it or not, sellers also can price too low thinking that they will attract a mob of buyers creating a bidding war to get this fabulous under priced property. Generally, unless you have a rare property, this doesn’t work. Buyers are disappointed when sellers refuse to accept low offers, and sellers are left with no sale.
Sellers also should not wait too long. The best offers always come in the early days and weeks of a listing. Remember there are always buyers out there who are ready, willing and able to perform and are just waiting for the right property.
The biggest mistake that buyers make is low balling an offer. The affect this has on sellers is usually to assume you’re not serious. It insults them and makes them not even want to negotiate with you. Don’t think that there isn’t anyone else interested in the property, there always is someone else.
Remember that a seller’s broker has a fiduciary obligation to the seller and has their best interest at heart. This doesn’t mean that they won’t treat you ethically, but don’t expect them to be cutting commissions just because they’re on both sides of the transaction.
So how do you make your offer stand out? Assuming it’s a fair offer, the next best thing you can do is come in with all cash. Nationally, 44 percent of winning offers were all cash. Cash offers remove the mortgage contingency, and if you really want to sweeten it up, also remove the inspection contingency.
Finally for sellers, if all else fails, you can always buy a St. Joseph Home Selling Kit. I kid you not, traditionally Joseph the husband of Mary is the patron saint of home and family. Believe me I’ve heard crazier ideas. And for buyers, cover letters submitted with an offer of purchase have become very popular. A cover letter can concisely review the terms of the offer, as well as making a personal case for why you want this property.
Basically there is no mystery to making and accepting real estate offers. With due respect to Sherlock Holmes, sometimes a mystery is just overrated.