You have just signed a contract to purchase your first home and find there are still several hurdles to jump before "closing the deal". Most offers are contingent on the buyer obtaining financing within a specified period of time and a satisfactory home inspection. In today's market, there is the additional challenge of the home appraising for full purchase price.
The home inspection and the appraisal can open a contract for further negotiations and create added stress on both buyer & seller. The inspection usually takes place within the first 7 to 10 days of the contract with additional time allowed to reach agreement on any necessary remedies requested by the buyer. During purchase price negotiations, sellers often come down to their "bottom line". Inspections create opportunity for further reductions to the seller's net proceeds.
The appraisal is a relatively new challenge to contract negotiations and is increasingly relevant in today's volatile market. The lender will have an appraisal done on the property prior to closing. Buyers are not going to want to pay more than an appraised value for their new home, and lenders are not going to want to provide a loan for the home.
Your real estate agent should be able to provide helpful insights throughout the entire purchase process. The 4forU Team has developed a referral list of reputable home inspectors to assist buyers with property inspections. Additionally, we have the skills necessary to negotiate this element of the contract. A comparable market analysis (CMA) is useful in assisting buyers and sellers with sale & purchase price decisions. A thorough analysis of the market helps insure that there will not be any surprises during the appraisal process.
Looking to learn more about selling or buying a home? Jeanne Gauer, Maggie Chudik, Kelly Cantwell & Susan Sutherland all have the necessary knowledge to help you close the deal!
Wednesday, March 26, 2008
Wednesday, March 5, 2008
Advice on Agency
Recently, I had an experience with Dual Agency that was quite challenging. In most real estate transactions there is an agent representing the seller and an agent representing the buyer. On occasion, there is a gray area called "Dual Agency", where the selling agent is also representing a buyer in the same transaction.
The drama of my particular story unfolded this week when I presented an offer for my buyer to purchase a $740,000 home. At the time our offer was open, I received a call from the listing agent to inform me that there was a second offer being submitted. Coincidentally, she was representing the buyer on this offer. I called my clients, explained the situation, and suggested they consider strengthening their offer if they were interested in purchasing the home. This was their "dream home" so they decided to increase the offer. Again... coincidentally... the listing agent called to tell me that her buyers had also strengthened their offer. The sellers would be reviewing both offers and establishing one as primary and one as secondary. They would then counter both offers.
The counter offer from the sellers placed us in a secondary position - no big surprise! In an effort to level the playing field, I insisted on presenting our best and final offer directly to the sellers. Unfortunately, the listing agent tried to obstruct that request. The sellers were divorcing and in deposition with their attorney so I submitted our offer to the attorney in a sealed envelope to be opened simultaneously with the primary offer.
If all of this sounds confusing, it is! Obviously there are revisions that need to be addressed by the Ohio Board of Realtors to protect buyers in this situation. Until that time, buyers need to be represented by an agent who knows how to negotiate these challenges. My buyers did not get their "dream house", but at least we all know that their final offer was presented properly.
Now we'll see if this home appraises :)
The drama of my particular story unfolded this week when I presented an offer for my buyer to purchase a $740,000 home. At the time our offer was open, I received a call from the listing agent to inform me that there was a second offer being submitted. Coincidentally, she was representing the buyer on this offer. I called my clients, explained the situation, and suggested they consider strengthening their offer if they were interested in purchasing the home. This was their "dream home" so they decided to increase the offer. Again... coincidentally... the listing agent called to tell me that her buyers had also strengthened their offer. The sellers would be reviewing both offers and establishing one as primary and one as secondary. They would then counter both offers.
The counter offer from the sellers placed us in a secondary position - no big surprise! In an effort to level the playing field, I insisted on presenting our best and final offer directly to the sellers. Unfortunately, the listing agent tried to obstruct that request. The sellers were divorcing and in deposition with their attorney so I submitted our offer to the attorney in a sealed envelope to be opened simultaneously with the primary offer.
If all of this sounds confusing, it is! Obviously there are revisions that need to be addressed by the Ohio Board of Realtors to protect buyers in this situation. Until that time, buyers need to be represented by an agent who knows how to negotiate these challenges. My buyers did not get their "dream house", but at least we all know that their final offer was presented properly.
Now we'll see if this home appraises :)
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