Submitting Offers Without Success?

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Despite the media hype about the overflow of real estate homes, buying a foreclosure in today’s market can be complicated. Without the right advice and guidance, buyers often become de-motivated, fed up and tired of submitting offers to countless foreclosures. Here is my simple tip for increasing your chances of scoring a good foreclosed home…submit an offer above asking price….higher….higher!

Why? REO sellers price their properties below market value. This is a tactic utilized to lure in as many buyers as possible offers, house, successfull, bid, bidding, closedinto a deal at the same. The lower the price, the more people find out about the property.

The more people find out about the property, emotions run wilder. And the more wild emotions get…the higher offer amounts people submit relative to the asking price. Off course…there is no need to submit offers above fair market value, but definitely above asking price. It is very usual to see 4, 5, 8, or even 10 offers on a particular property.

In addition, knowing what terms (non- price related) should accompany an offer is key to a successful bid. Say you are financing a deal, yet we know we are competing against cash offers. Well, cash offers mainly have two contingencies that protect them (which is why sellers prefer cash as opposed to financing where you may have at least 5 or 6 contingencies that protect the buyer)…the inspection period and clean title.

For a buyer that is financing a deal, your inspection, appraisal, title, letter of commitment and so on…must be super aggressive in order to entice the seller to choose your offer over the cash deal. It’s tough, but doable.

Thick Skin For Buyer Feedback

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kendall sunlight

Apart from price, marketing advertising, etc…listening to buyer feedback is key to selling a property. Married people should be pros at this. Often, sellers want to fix this and update that and upgrade the other. Non sense. The chances of finding a buyer with your taste, or somewhere similar, are slim to non.

Want to increase your bottom line? Don’t spend it…yet.

If the flaw with your home is not detrimental (there is a waterfall coming thru the roof), don’t fix it. Put the home in the market and see what people’s opinion are all about if any. If buyers complaint about the same thing, then, you do something. You either adjust the price to reflect the problem or fix it. This will save you time and money and believe it or not, you will make the buyer happy for not picking granite counter top colors of your taste.

Once the problem is fixed, call those buyers back and negotiate. Last piece of advice; ask for buyer feed back while showing the property or as they are stepping out the door. See…most buyers are not just looking at your house. They are seeing several. So unless they like yours in particular, they will not remember your home’s features if you wait to ask a day or two later.

Last…last…piece of advice. Grow some skin. Some feedback may not be pleasant, some may be great. The whole point of this is to help you spend less money fixing things, save you time, and sell the property quickly. This is not a popularity contest.

Short Sales Suck? Not So.

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Short selling a property in today’s market is a whole different ball game than what it used to be a year go or so. For the better. A combination of a dried-up-inventory-market and quicker negotiation turn-around is making short sales (aka: underwater homes) that much more attractive.

Back in the day it was normal to work with a buyer’s offer without collecting earnest money upon execution of contract. The bad part about this old way to handling a short sale was that 6 months down the road, once a short sale was approved, most buyers would go MIA (missing in action). This created a mess in terms of having to re-approve the short sale with a new buyer’s name often delaying the process another two or three months.

Now that inventory is dried up and short sale departments are on the ball about getting short sales approved, they are a commodity. Considering all the bidding wars and multiple offer situations that exist in well priced properties, it can be somewhat emotionally complicated to buy an REO making short sales a good option to go after assuming a buyer does not need a home within the next 6 months to a year. Because of this, demanding (as part of the negotiation process) buyer-earnest money upon execution of a contract is a must…and buyers will wait.

If a buyer does not want to put money up front, move on to the next. And the next. And the next. Until a buyer is found that will stick with you until the short sale is approved. It’s a seller’s market out there, even if your upside down.

Home Pricing 101

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custom made mailboxBuyers determine value by what’s called comparison shopping. In essence, buyers look at two prime elements when shopping  for a property:

  1. Value…or particulars a home offers a buyer such as a having or not having a pool, tiled roof, hurricane shutters, etc…and
  2. Price

Then, a buyers compares these two elements against other similar properties in the immediate neighborhood to make a decision what gives them the most value for the price.  Hiring the right agent to assess the value of  a property is pivotal, perhaps even more than advertising and client service.  Not having the right price on a home can mean the difference between a property selling in 30 to 60 days as opposed to not selling at all.

Keep in mind that pricing a home is an art. There is no formula. So…during a listing presentation, ask your agent…”how do you calculate the price”. If it makes sense, hire them. if it does not, move on. If the logic makes sense, great. If it does not…ask questions. An agent that knows what they are doing will answer all your questions with confidence and ease regardless of how much you may or may not like what you are listening too.

Yes…look out for confidence and ease. Why? The price of your home is created by market forces, not an agent. If we had that kind of power, we would be sipping margaritas in Tahiti on our private island. Since we have no control over price, we are merely the messengers of this data.

And because of this notion, there is no reason why a real estate should not be confident and at ease when delivering the price.  Any lack of the latter means two things: the agent is not telling the truth in order to get the listing OR they are not sure how they derived your home price.

12401 SW 97 ST Kendall FL $335,000 (SOLD)

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Not a foreclosure nor short sale. No HOA. Corner-lot home with pool and 2-car garage in spectacular location of central Kendall. Vaulted wooden ceilings hover over open dining / living areas. Two-year old roof, hurricane shutters, solar water heater and tiled flooring. Updated open kitchen layout with breakfast counter tops overlooking family room with functional fire-place. Spacious master bedroom with ample closet space and private bathroom. Large screened yard / bricked patio with storage.

Property details:

  • Address: 12401 SW 97 ST
  • City, State and Zip: Kendall FL 33186
  • Asking Price for sale: $335,000
  • Short sale or foreclosure: No/ No
  • Type of property: single family home
  • Subdivision: Pakto Sub
  • Living and lot size (sqft): 2,342/ 7,702
  • Year built: 1986
  • Beds, full baths and half baths: 4/2/0
  • Garage: 2
  • Water front or access: No/ No
  • Exterior walls and roof: concrete/ shingle
  • Floor and pool: tile/ yes
  • Heating and cooling: central/ central
  • Sewer: municipal

What’s Up Around This Home?

Publication1

Monthly Mortgage Payment at 4.5% interest rate, 30-year fixed, and purchase price of $336,000:

  • FHA loan with 3.5% down: $1,637
  • Conventional loan with 5% down: $1,612
  • Conventional loan with 10% down: $1,527
  • Conventional loan with 20% down: $1,357

Need other mortgage scenarios? Mortgage Calculator

Local Schools:

Location:

 

Area Demographics:

  • Average Income: $74,754
  • Population: 65,433
  • Owners vs Renters: 72% and 28%

Check out the latest Kendall 33186 Demographics Summary or Kendall 33186 Demographics Detailed analysis.

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Prices Up. Show Me The Money!

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budildings in kendall

A combination of almost no available inventory due to sellers holding on to the fence and foreclosed homes not hitting the market at expected rates is creating a nice upward price-ride for home sellers. Price a property 5% to 10% above fair market value based on sold comparable during last 6 months and it will sell. Obviously, choosing the comps are key to determining the correct floor to set the price. So…if there no inventory, buyers are getting loans and have the cash to close them…where’s the bump in the road?  Appraisals.

Appraisals continue to be the itch in a healing wound. If they was only a science to calculating price across the board, life would rock. But it’s not a science. Unfortunately its an art. Yes…Zillow is good at getting close to giving an idea of what is a house is worth, but not great. Mind you…I am a fan of them. But this is not about Zillow or the appraisers. This is about an industry that is picking up at a pace no one ever saw coming.

Critics. Say what you want. This is a phase. This is temporary. Who cares. Even if it is. Its a step int the right direction. Its positive news. And we will take it any day of the week. Based on numbers, I don’t think this is temporary. At least not in Miami Dade County considering that at this point in time there is only a 4-month supply of inventory across single family homes, townhouses and condos. Yes. Condos. I know. I can’t believe it either. Don’t believe me? Put you property for sale at the right price (just for cracks and giggles), and you will see offers (plural) lining out the door. And that goes for ugly homes too.