(Sigh.) I can’t tell you how often we hear questions like these in our business:
- “Got any good deals?”
- “I’m looking for a good deal.”
- “I only want to buy property if it’s a good deal.”
Then, there are folks who say:
- “Let me know if you have any good deals.”
- “I’ll work with you if you have a good deal.”
- “Maybe if you are the listing agent I can get a good deal.”
Let’s face it. EVERYONE wants a good deal. I doubt you’ve ever heard someone say “I want to get ripped off and pay way too much for a property!”
There are 7 days in a week and 24 hours in a day. In this time, our efforts will be used on our buyer and seller Clients who’ve committed to working with us and who are serious enough to have their financing and cash reserves in order before we see property together on an exclusive basis.
We take our role in representing our Clients seriously and our Clients take it seriously too. We find great satisfaction in helping to make things happen for them. We have no qualms about telling our Clients if we believe a property is overpriced or being clear that if they want the property, they’ll have to be willing to pay a premium compared to the competition of buyers for the same property. Our seller Clients appreciate that we sometimes counsel them NOT to take the highest offer but to focus on choosing the buyer who is most likely to close the sale, as long as the price is reasonable.
Now, about those good deals. When we do come across “good deals”, we’ll let our Clients know about them first. There is a huge difference between a “customer” and a “Client”, so we reserve our more in-depth communications for a select group. The last thing our Clients need is for our efforts to be diluted…
Checking Out the Goods
Last night we had a great conversation with a newly engaged couple looking to make their first big purchase together. They asked this question:
“Can we still make offers on other property while we’re in contract on a purchase already?”
My question back was, “Would you ask someone to marry you if you were already engaged to someone else?”
Being in contract to purchase a property indicates that you’re committed to purchasing that property. Much like a fiance is committed to his fiancee, there may be an expectation that one not go out for the purpose of committing to another.
Similar to being engaged for marriage, a home purchase contract can include a contingency period when the buyer has the opportunity to “check out the goods” of the property to make sure it’s sound enough to make that final, lasting commitment.
We had a lively conversation about which circumstances might justify the submission of several offers at once. Here are a few things we discussed:
- Only make offers on multiple properties if you can afford to purchase them all.
- If you are waiting for a response from one seller and decide you want to buy another property instead, withdraw the offer on the other property first! (Same concept as NOT asking someone to marry you if you’re already engaged!)
- Work with a reputable agent who can exercise some important controls. Remember, in order for a buyer to be taken seriously, their agent has to be taken seriously too.
By the end of our meeting with this lovely couple, they committed to working with us for the purchase of a HUD-owned property. Since we are approved by HUD to assist our buyer clients, we’ll enjoy knowing that our clients reached out to us already knowing we’re qualified to help them. We can consider it a successful first date!
We are in the midst of an interesting dilemma with pricing several properties for sale.
- A house that’s JUST on the cusp of being a short sale
- A property that is not a short sale but is stuck COMPETING with short sales
- A luxury home that is unique, rare and in a neighborhood where it appears that a “fire-sale” has taken place around the corner, lowering the average price per square foot
How do we deal with pricing?
For the potential short sale: Just price it right, based on what’s happening in the neighborhood with similar homes. Remember, the seller’s lender still has to approve the short sale amount before a buyer can purchase the property. There are programs available to qualified sellers that will give them money ($3000) for relocation assistance, such as HAFA.
For the property with equity competing with short sales: Just price it right, based on what’s happening in the neighborhood of similar homes. It’s important to be careful not to have a downward spiral of competing price reductions against those short sale sellers. Example: You lower your price, they lower theirs, then you lower yours again, then they lower theirs again…STOP the madness before it even starts!
Sometimes it’s better to stand firm on (the reasonable) list price and be willing to budge when an offer comes in. Short sale sellers often have nothing to lose since they have no equity anyway. Representing a seller who has equity takes a certain level of care…
For the unique luxury home: Just price it right. There’s nothing in the world like this home. In the absence of enough suitable properties to compare, we make sure a formal appraisal is conducted for this type of luxury estate to determine an objective third-party basis for a List Price. Many luxury sellers do not have to sell their homes. They can sit tight and wait for the right buyer to come along.
The one common denominator for determining a List Price for the three scenarios above:
JUST PRICE IT RIGHT.