Should you Make an Offer on an Overpriced Home?

If you are actively looking for a home, you've seen them. Probably a lot of them. Overpriced homes for sale. But what if you like that house? Will the seller ever negotiate to a reasonable price on that home you want to buy in Connecticut?

You won't know unless you have the right agent on your side, and unless you try. It's important to have a good understanding of the different  types of seller motivations that influence listing prices and the amount of negotiations that seller is willing to consider, in order to arrive at the decision as to whether to place an offer on that particular house or not.

Sellers have their own pricing mentality, or level of motivation, that can pretty much be summed up into three categories:

CLEAR CHOICE SELLERS Have to or Must Sell – This homeowner absolutely must sell the home, and the asking price  clearly reflects that. These homes are generally the best deals out there, and have an excellent chance to sell in any type of market. They attract more qualified and realistic buyers, and sell at higher list price to sale price ratios.

THE MAYBE SELLERS Should sell, but want top dollar  – This homeowner does have a real need to sell, but has not priced the home correctly for one of many possible reasons. They may feel as if they have to "net" a certain amount, and can be stubborn about it, until enough time passes wher it becomes more urgent. They may also feel that they can test the market at a higher price to try and get more money, and gradually reduce it. They may also try and mask this  to their own agent  by insisting to put "negotiating room" in the listing price.

SLIM CHANCE SELLERS If I get my price, I'lll Sell – This type of homeowner doesn't really need to sell the home, but if they can get their price, they will.  If not, they will just stay in their home, and not be too concerned about their house not selling. There is a strong probabilty that this type of homeowner will not sell their home in today’s market, so home buyers who actually view this type of property are just wasting time. This listing will most likely end up as an "Expired"

So how is a buyer to tell which type of seller is which?

Truly, that's your agents job.Your agent should have the skillsets to "read between the lines" of the listings that are most likely to interest you, and discuss  whether the seller appears motivated or not BEFORE you even go look at the house. That could be in the form of getting you prepared to make an offer on a house that looks like a great deal, or preparing you for a house that meets your needs and wants but is priced too high for the market.

Market time, showing availability and prior listing history on the  house, including how many times it has been listed, what the price reductions were and when, and also public records search are all useful in determining seller urgency

I am always of a mind to try and negotiate with any type of seller, even if it's a "Slim Chance or a Maybe".  Circumstances for that seller could have changed this morning or even yesterday, and that seller might be willing to listen to an offer today that they would not have even dreamed about considering just last week.

The Slim Chances and the Maybe's have egos to contend with, but we would be remiss if we didn't consider their agent's egos as well. So now we have yet another fly in the ointment that has to be handled delicately, if it's going to be at all effective.
 
I remember  one particular negotiation that I knew would be a tough one based upon pricing and the agent's ego. It was an estate property, so the bottom line for the sellers was the money, period. I called a meeting with the sellers agent and sellers, and explained to the agent that we were bringing in an offer that was significantly less than the asking price, and I wanted the opportunity to present it in person, rather than the by the standard back and forth via phone or  fax. He agreed.

We met at the house, and I came prepared with about an inch and a half of comparables, statistics, and the like- never once disparaging the listing agent for pricing the home so improperly. The sellers agreed that after going through all of my statistics that  my pricing was correct. I took all of the heat off that agent for presenting what was considered a low offer, the agent was grateful for saving face, and we put the deal together. The sales price to list price ratio on that house was 71 percent. I'm proud of that, and that's not the only one. So it can be done. If it's the right mix, the right negotiations and the right house, it doesn't hurt to try. The right agent representing you doesn't hurt, either- and I just happen to know someone..... (me!)

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

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Buyers and Sellers- How to Prevent a Failed Building Inspection on Your Home

Nobody's too happy when the house doesn't pass a building inspection.  In fact, everyone has to start from square one all over again....The seller, the buyer, and both agents that are involved. Everybody begins their tasks all over again- and that should ALMOST NEVER be the case.
 
A failed inspection would only occur rarely in the market if agents educated their clients during the process.

It is extremely rare  that my clients have had to endure a failed building inspection, and that's whether I represent the seller or buyer- and I have sold hundreds of properties. ....So what makes such a big difference for my clients as opposed  to everyone else?

Education and disclosure. Those two factors will prevent over 99 percent of failed inspections.

Education:

For Buyers: Look closely at the home before you place an offer in on it. My buyer clients get a kick out of looking at houses with me, because I perform mini-inspections as we look at homes, and educate my buyers as to what potential problems there may be if any. I knock on tiles, stomp on the floors, and poke wood that looks like it needs poking.  I am not a building inspector, and do not have that specialized knowledge, but I have attended EVERY home inspection for EVERY home that I have ever sold. If some knowledge hasn't rubbed off on me to impart to my clients, then I wouldn't belong in the business. A couple of very good things result out of this practice- One, if the house doesn't pass my mini-inspection, there is no need to put an offer in on the home and spend money for an inspection that won't end up on a positive note, or, Two- the buyers make their offer knowing that there are some issues that will need to be addressed and are not blindsided by the building inspection.

For Sellers: When you decide to put your home on the market, you  pretty much have a good idea as to whether there may be issues, which could or would break a sale. Tell Your Realtor!  Once you are lucky enough to have a sale, you don't want to needlessly lose it. As a listing agent, I do that same mini-building inspection that I do for buyers when I list your home, and try to find the most common deal-breaker issues that may arise so that we can address them prior to putting the home on the market.  If I see something that looks like a specialist is needed, I'll say so. It's much easier to fix it now rather than fix it later, AND risk a sale because of it.

Disclosure

For Buyers: When buyers disclose found issues prior to the formal building inspection and adjust their offering price because of it, sellers are more likely to accept that offer given that they would have to address items with any future buyer as well. It gives the owner some peace of mind that they won't be nickeled and dimed at time of inspection, which seems to be a common occurrence these days. ( I do not subscribe to the last minute nickel and dime tactics. )

For Sellers: Disclose your known issues, or your suspected issues. By the way, it is the law. Besides that, the little items that wouldn't normally mean a thing to buyers become amplified when there are bigger issues to address, and  they can feel like there might be a lot of hidden problems that the inspector hasn't even found. What happens then is the proverbial straw that breaks the camel's back, and it's hard to keep the deal together or even renegotiate if that's the case.

If buyers have a good idea what they are getting into right from the get go, they are less likely to "walk" after a poor inspection report. They will already be aware of most of the issues. If sellers feel that the buyers have been honest with them, they are more likely to negotiate, or renogiate as the case may be.

Simply put, your agent has to have well rounded skills- marketing, negotiating, and good solid knowledge of a home and its components. You deserve nothing but the best.

When you're ready to buy or sell, contact me. It's my job to keep everything running smoothly, and especially when it gets rough- without worrying you about it unless absolutely necessary.

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Why You Should Consider Buying the Worst House on the Street.

It just sounds funny- but consider how much money you can save on your purchase by  buying a home so discounted from its appearance that even after repairs or minor remodeling, that you come out with additional built-in equity?

Just as there are reasons why you shouldn't buy the best house on the street (without serious consideration), there are plenty of reasons that you should consider buying the worst house on the street.

Those sellers aren't getting many showings. As a matter of fact, homes with less than great curb appeal don't get shown as often even in a sellers market, and that can only be amplified in today's market.

There are a number of buyers that won't even look at a house if it doesn't have curb appeal. And just so you know,  the definition of curb appeal can be quite broad. Most commonly, it is the landscaping, and/or the initial reaction of driving up to the home for the first time and not getting that warm and fuzzy feeling. Maybe there is a an addition that doesn't appear to "fit" the property, or is downright ugly.

I remember one house in Fairfield that was... mmmm... let's say "unattractive", (and that's an understatement). It had all the features that my client wanted, but .. as I said, it was unattractive. I had to almost drag the wife in to look at. It was brick, stone, and three different colors of vinyl siding that highlighted a dormer addition on the second floor.. Yuccch!  But the house was absolutely stunning inside. Once we figured out what it would take financially to change the outside appearance and how inexpensive it was to implement, my clients bought it. They changed the siding to one color, and it transformed the house entirely to a beauty.

So maybe it's even the color of the house, maybe the home just looks kind of plain and unadorned, or maybe it looks a bit run-down.

No matter which of these factors play into a home's less than desirable curb appeal, there's one thing that they should all have in common. The price of the home reflects it (or it should).

There is something that nobody thinks of when they look at these types of homes. Some homeowners are more concerned with the inside than they are the outside. The inside of that home can be absolutely beautiful  and you would never know it if you judged that house from the outside alone. (Just like my clients were judging that house that they ended up buying)  Maybe you have seen a house that looked immaculate on the outside, and was just a wreck inside. Same principle, just reversed.

For example,  we all know people who love to tinker in the garage or basement, and you might be able to eat off the floor in those areas of the house- but the rest of the home? maybe a tad  on the messy side? Everyone has different priorities- just like what is clean to one person would be considered filthy to another, and we all have our individual tastes, too.

Remember, just as you pay premium pricing for pristine condition, you'll get the opportunity for a greater discount with a home that just needs inexpensive  cosmetics to dress it up. My very cute and very petite grandmother had a little saying that used to crack me up- "A little powder... a little paint.... makes you look like what you ain't".   Well, the same goes for real estate.

So think of that home with less than great curb appeal as a very good investment opportunity. How much would it cost to  fix that less than attractive front of the home? Would the cost of the improvement be worth it if you were to buy that home? If the house isn't priced accordingly,  is it possible to negotiate with the seller to a price that would make it worth your while? All things to consider when you are buying your next home. Be open in your search.. and don't count out that less than attractive house just yet.

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Buyers Agency Agreement in Connecticut. Do you have to sign it?

When you are all ready to see houses, and excited about the prospect of seeing those homes, especially if one of them really caught your eye, there's almost nothing worse than having a piece of paper shoved in front of you the moment you meet an agent and being told that you MUST sign before you can see any properties.

It's simply not true. You don't have to sign anything. It's not the law.... (for you)
Now, the real estate agent is bound by law to discuss agency with you at the first substantial meeting. Whether or not you choose to sign an exclusive buyer representation agreement is entirely up to you. You should not feel pressured by any real estate agent to ever sign anything..

Buyers Agency agreements are intended to protect the buyer. Years ago, all agents represented the seller, and owed their fiduciary responsibility to the seller. So even though you were working with an agent who was showing you properties, that agent worked for the seller to get them the highest price. Seems a little quirky, doesn't it?

That's one of the reasons that Agency was changed, and there are all types of representation agreements. You can choose to be exclusively represented by one agency, you can choose (with the appropriate agreement and language) to work with a number of agencies, you can choose to be represented  for specific properties only, you can choose representation for the day, the week, the month, etc., or define your parameters for the agreement in most any way you want. You can also choose NOT to be represented. By the way, there is also an agreement (form)  for that, too.

What I am saying here is that the agreement, and type of agreement is also negotiable. If you are ever pushed into signing ANYTHING, run... don't walk to the next agent.

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Trust Your Gut. Spot Red Flags When Negotiating the Sale of Your Home

Your gut instincts are usually right on target. Learn to trust them. Sometimes, we get that gut feeling that something can or will go wrong, and we dismiss them for whatever reason. Maybe it's because  the reason we got those gut feelings is because of something totally unrelated, and we recognize that. Or, maybe the other party did something  to diffuse the initial concern.

Nobody ever wants to tell you, "I told you so", and you should not ever have to feel like saying to yourself, "I should have listened to my gut and I didn't. That's what got me into this predicament"

So let's talk about those gut reactions, and gut feelings when it comes to negotiating. When you can chalk those up to past experiences when there are many of the same factors involved, it is time to listen.

This may seem out of context, but it really isn't, if you think about it.  A few years ago,  I went to a Realtor safety class that was given by a seasoned detective. He gave us a great presentation and went on to say that we (as Realtors) put ourselves at risk  on a daily basis. He said something that resonates with me to this very day, and that not only involves personal safety, something that is smart thinking in day to day life- and I have taken that one step further to include negotiating.

What he said is that is if you have a concern, you learned that (physical and/or) emotional response from a prior event. Listen to your gut. If it says you need to be concerned, then be concerned. Period. And take an appropriate course of action.

Now what does all of this have to do with negotiating? We are not talking about safety issues, we are talking about negotiating. And that, we are...

You probably have not been involved in a large number of home negotiations, but I am assuming your real estate agent has. There are few obvious red flags to concern yourself with.

When the party on other side of the transaction displays some behavior that just doesn't seem right and it's right there from the beginning, don't expect it to get any better throughout the transaction.

If a buyer or seller is nickel and diming you from the very beginning, expect it to last right up through and including the closing.  That doesn't mean that you shouldn't work with that buyer or seller, it just means that you should know what you are in for, and to be ready for it. That may mean holding back some negotiations that are inevitably bound to happen before the closing.

If a buyer or seller agrees to a contingency or modification of the offer, and then reneges, expect that to happen throughout the transaction, if it ever comes to fruition.

On the other hand, when the other party tends to be reasonable, they will most likely be reasonable throughout the transaction. So your gut isn't always telling you that there is something to be concerned about.

Your agent (that would be me) knows how to negotiate and counteract those  seemingly little items that tend to pop up, and that could very well amount to much more than they initially appear. So count on your professional agent to guide you in the right direction and handle the bumps along the way.