Can a home seller change his/her mind after accepting your offer?

You've made an offer, the seller accepted it, and all of a sudden, your agent calls you to say that the seller is accepting another offer instead of yours. Can this really happen? .... Unfortunately, yes.

This is a frequent question where the answer  can fall into a gray area depending on how far along you are in the transaction. First of all, if you happen to be in this particular situation now, contact your attorney immediately. I am not an attorney, nor will I, or can I offer legal advice.

Let's say you place an offer with the seller, and after some negotiating, you come to an agreement on all terms. In order for the offer to be valid, it must be signed by both parties. A verbal contract is virtually unenforceable. (again, contact your attorney)  

In our area of Fairfield County, most offers are written on binder forms (which are not considered contracts). The sellers attorney will prepare a contract based upon the terms and conditions as set forth in the fully executed  binder agreement.

If the seller has not signed the binder, and another offer comes in, that seller can accept that offer, and not even give you the option, or the opportunity to change your already verbally accepted offer. A verbal acceptance means virtually nothing until you have an authorized agreement.

As a matter of fact, ALL offers must be presented to the seller up until the time of closing. The seller may choose not to accept another offer, depending on a variety of factors, including first and foremost, his attorney's advice which will most certainly take into account how far along course the transaction is, and what damages may be incurred if the seller chooses to take that offer.

The best thing to do is to perform as per your agreement as outlined in your agreement. Your agent will guide you to stay within the guidelines that are set forth and hopefully avert this kind of thing from happening. .... and I just happen to know a great agent! Contact me when you are ready to buy, and I will be your advocate. Here are a few testimonials.

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Common misconceptions about renegotiating after a building inspection.

When you purchase a home, your offer should be contingent upon favorable review of a building inspection that you (as the buyer) pay for. A building inspection by a qualified inspector (www.ashi.com) should be completed within 5 days of a negotiated binder agreement or as agreed by seller and buyer at the time of agreement, and made part of that agreement.

The building inspection's purpose is to find out whether the home has any major defects, or needs any major repairs that would be undiscoverable to an untrained person. A building inspection is not always cause to renegotiate the purchase price if the report is not as favorable as you would like it to be.

Normal wear and tear, improvements that are important to you but are unnecessary to another buyer, cosmetic changes that you would like to make,  and anything that is obvious to you or your Realtor when you see the home is not cause for renegotiation.

A rule of thumb- If you and/or your Realtor can notice defects at the time you view the home, you make the offer with that knowledge.

1. If the item  has to do with safety, it should be addressed.
2. If the item has to do with anything that could fall under the heading "Protect Your Investment" it should also be addressed.

Some examples of both and do's and dont's for renegotiating:

A roof that needs replacement because of age - DON'T (your Realtor should have seen this)
A roof that needs replacement because of defective shingles DO
A furnace that is older but still working DON'T
A furnace that is not working properly DO
An electrical panel that is not upgraded DON'T
Double tapped breakersor safety issues  in the electrical panel DO
Asbestos related materials present and confirmed DO
Leaking pipes DO
Hardwood floors that need refinishing DON'T

Renegotiating can mean anythng from having the seller perform the repairs prior to closing, to crediting the buyer for the repair work,  including certain items with the sale that were not included previously, or any combination of the above.

With me as your Realtor, I will always point out defects in the home when we first view it- it is senseless and a waste of your money and time for me NOT to tell you the bad along with the good. I am not a building inspector, but I can say this- I have attended every building inspection for every home that I've sold, (and that number is in the hundreds)  and learning about what to look for becomes much easier with repetition. You can benefit from that knowledge. When its' time for your inspection, make sure you attend, stick to your inspector like glue , and ask lots of questions. And if you forget, I will most certainly remind you!

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The age old dilemma- do you put your home on the market before you find another house?

So you've decided that you would like to move. Great! What happens next? Do you go out looking at houses to see if you like anything enough to sell your home? Do you put your home on the market, wait until you get your deposit, and then start to look? Ask different people and you'll get a different answer.  So how do you know what to do?

There are a few things to consider in order to come to the best decision.

The market's health
Your own expectations

Market Health: In a slow  to average sellers market,  it's certainly okay, and probably a good idea to preview just a few houses in the town and price range that fits your parameters, but don't overdo it, and DO NOT look for that perfect house first.  A buyer who is ready  to buy will probably purchase that home before you have the ability, if you need to sell your current home first before you can qualify for a loan on the new house. You cannot compete with a buyer that's ready to go, when you are not. It's time to get serious when you get the initial deposit on your home. Remember, don't back yourself into a corner with a 30 day closing . Your agent (that would  be me- will guide you every step of the way)

If it's a sellers market, it's pretty much a simultaneous operation and requires that you be available to see homes whenever your agent calls you with the hottest properties. In this case, I would suggest that you also preview a few homes before you list yours for sale, and have your agent search every day for your next home  during the time that your home is on the market. If you get a buyer before you have found your next house, you can always extend the closing date to give you some breathing room.

Your expectations- and this is true for any market. If you go out and preview homes and nothing even remotely seems appropriate, then you have to do some soul searching on a few items-

1. Is your agent doing everything he/she can to showi you properties that fit your needs?
2.. Do you have unrealistic expectations?
3. Can you afford to move up to the type of home that you desire?
4.. Are you ready to make a move?

I will help you to make appropriate decisions regarding your move. None of my clients hav eever been without a home during my 26+ years being a Realtor, and I have helped hundreds of clients.I am NOT about to break my record on you! Contact me today and I will be your advocate.

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Do you need a Mortgage Modification? READ THIS FIRST!

This article is so important and informative about Loan Modifications and Scamming practices to watch out for,  that I just want to share it with you, or anyone else that you know that might need a little information on modifying their loan.

SOURCE ( National Fair Housing Alliance) – Four fair housing organizations released their findings of a year-long undercover investigation of 80 loan modification companies, which reveal an industry rife with corrupt practices.  The National Fair Housing Alliance, the Connecticut Fair Housing Center, Housing Opportunities Made Equal of Virginia, Inc., and the Miami Valley Fair Housing Center issued a report entitled, “Have I Got a Deal for You!  An Undercover Investigation of Mortgage Loan Modification Scams,” which documents the tactics mortgage modification scammers use to take money from vulnerable homeowners.  An analysis of the 80 loan modification companies uncovered common tactics used by scammers to entice homeowners to use their services:

• 55% required an upfront fee to start work or required a low initial fee to conduct minimal work on behalf of distressed homeowners, such as reviewing loan documents;
• 43% guaranteed or promised they could secure a loan modification even before learning about the homeowners’ financial limitations;
• 24% advised or encouraged homeowners to stop making their mortgage payments or to stop contacting their lenders;
• 16% guaranteed a new, much lower interest rate ranging between two and 6 percent on modified loans;
•  12% discouraged homeowners from seeking free help from government-approved housing counseling agencies;
• 8% encouraged homeowners to provide fraudulent information to their lenders.

“This is shameful abuse by loan modification scammers to take advantage of desperate homeowners,” said Shanna L. Smith, NFHA President and CEO.  “We and our partner organizations will work to see to it that these companies are prosecuted by the Federal Trade Commission and other federal and state enforcement agencies.”

With one in nine homeowners nationwide more than 90 days behind on their mortgage payments, a lucrative industry of mortgage modification and foreclosure prevention scams has emerged.

Investigators working on behalf of the fair housing organizations captured scammers saying things like:

    “I’d be breaking the law if I told you to stop paying your mortgage, but friend-to-friend, you won’t get a loan modification until you are behind on your mortgage.”
    “If you don’t qualify, we modify expenses for you. They [the lenders] don’t check it.  No one knows what you spend on groceries.  We make you qualify by playing with the numbers.”

Among other recommendations, the fair housing organizations call upon the financial services industry to recommit itself to providing sustainable loan modifications so consumers do not have to turn to scammers; they call upon the Federal Trade Commission to strengthen its new MARS regulation to prohibit upfront fees for all loan modification companies, including law firms; and they call for strengthened enforcement and education efforts by the federal government.

To read the full report, go to www.nationalfairhousing.org.

About the National Fair Housing Alliance (www.nationalfairhousing.org)

Founded in 1988, the National Fair Housing Alliance is a consortium of more than 220 private, non-profit fair housing organizations, state and local civil rights agencies, and individuals from throughout the United States.  Headquartered in Washington, D.C., the National Fair Housing Alliance, through comprehensive education, advocacy and enforcement programs, provides equal access to apartments, houses, mortgage loans and insurance policies for all residents of the nation.

SOURCE National Fair Housing Alliance

When is it time to reduce the price of your home?

Your home has been on the market for two months. You've had some showings, but no offers. Is it time for a reduction? and how much do you reduce the price to?

You might think to yourself, "well, the market is slower right now, my home is priced fairly- it's just a matter of time and having enough buyers come to see my house. Change your mode of thinking!

I don't care what type of market we're in, if your home does not have an offer within two weeks- a month AT MOST, reduce the price. Buyers flock to a new listing- they are actively looking and any time that something new comes on the market, they will want to see that home if it fits their criteria. Your best opportunity for an offer resulting in a sale comes when your home is first listed.

After that, you just wait for new buyers to come into the market. Your biggest pool of buyers occurs when your home is first listed. The next biggest pool of buyers comes when you reduce the price, and that has to do with two things. Buyers that may have seen your home come on the market  and felt that your price was just a little rich for them and were hoping it might come down, and the buyer pool in your new price range.

As fas ar how much to reduce, here are the hard facts. You may not like it, but here it is. 27 years worth of experience has taught me this much at least. Reduce your home by a minimum of 5% for it to make any dent.

Here's why- A lot of buyers will consider offering 90% of asking price for a home, and they do not feel like it's a lowball offer,- most houses sell at an average of 95% of asking price anyway in our area. If  your house was priced "right on the money",  they would have offered something already by this time. So, reducing your price by that 5% will surely incite someone to make an offer, where you can start to negotiate. No one says that you have to give your house away, and no agent should ever push you into accepting an offer that you are not comfortable with. I know I wouldn't. Just remember,  buyers ultimately determine market value.