Wednesday, May 31, 2017
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Friday, May 19, 2017
Making an Offer: 5 Mistakes to Avoid
DAILY REAL ESTATE NEWS | WEDNESDAY, MAY 10, 2017
In competitive housing markets across the country, making an offer that sticks has become increasingly difficult. Ensure your client doesn’t make the process even tougher by succumbing to one of these common mistakes.
“Time kills deals,” says Andrew Sandholm of BOND New York Properties in New York. “Dragging your feet means you could wind up paying more in a bidding war situation or missing out on the property altogether.” Buyers need to be ready with their paperwork, such as bank statements, a preapproval letter, and documents supporting proof of funds, from the day they begin house-hunting mode. That way they can pounce quickly with an offer when they do find a home they like.
Making an offer for their preapproved amount
Smart buyers are getting preapproved to show a seller they’re financially able to purchase a home. However, Chuck Silverston, principal at Unlimited Sotheby’s International Realty in Brookline, Mass., warns buyers against using that document to come up with an offer amount.
“Many buyers come in with a preapproval for the exact offer price, but when you’re competing against other offers, including cash offers, you want to show financial strength,” Silverston says. “An exact preapproval could make a listing agent nervous because not only does the buyer not have any wiggle room to negotiate, but they might no longer qualify if interest rates rise.”
Submitting a lowball offer
Lowballing a seller often backfires, particularly in a seller’s market. “A lowball offer that isn't backed up with math or comparable sales data is disrespectful and could turn off the seller and possibly mean you will miss out on the property completely,” Sandholm says.
Waiving inspection contingencies
“I don't care whether it’s new construction or even your mom’s house you’re buying from her – get it inspected,” urges Joshua Jarvis of Jarvis Team Realty in Duluth, Ga. Further, if you waive the inspection contingency in your offer, you may lose the earnest money if you later back out of the deal.
Not presenting yourself well enough
In a seller’s market, buyers need to take steps to make sure they look good in the eyes of the seller. “In today’s highly competitive environment, the listing agent is trying to determine which buyer will be the easiest to deal with,” Silverston says. Buyers may want to avoid pointing out every defect, making nitpicky queries, or questioning the seller’s tastes.
“Basically buyers who act less than enthusiastic will see themselves at a competitive disadvantage when sellers are comparing multiple offers,” he says.
Source: “In It to Win It: Land Your Dream Home By Avoiding These 7 Mistakes on Your Offer,” realtor.com® (May 10, 2017)
Thursday, May 18, 2017
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Tuesday, May 9, 2017
If Buyers Want to Save Money: Tell Them to Shop
DAILY REAL ESTATE NEWS | FRIDAY, APRIL 28, 2017
Home buyers who don’t gather more than one quote when shopping for a mortgage may be losing out on some savings to their monthly payments.
Read more: Consumers Turn to Non-Banks for Mortgages
Lenders can offer a wide dispersion of rates, up to 50 basis points or 0.5 percent, after controlling for factors like the borrower’s down payment and credit score. That could be the difference between a 3.5 percent versus a 4 percent mortgage rate, according to a recent study by two economists at the Consumer Financial Protection Bureau, who culled mortgage data from 2014.
The authors offer up a scenario of what would happen if consumers had done an additional search for rate offers. Just one extra search could potentially reduce a borrower’s monthly payment by $8.63, on average. Adding five more searches could help them reduce their payments by $17.03 per month (that’s about $204 over just one year in savings). That said, the borrower’s initial offer may end up being the strongest in some cases, despite additional searches, the authors also note.
But in general, the researchers say that borrowers’ shopping around forces lenders to compete and likely will reduce the costs the borrower will end up paying.
“Tell your clients, especially first-time buyers, to shop more,” notes the National Association of REALTORS® Economists’ Outlook blog, interpreting the study’s results. “It may save them money. They should use websites that quote multiple lenders and get multiple offers on their own from large retail lenders, smaller banks or credit unions, and mortgage banks. But always consider the total cost, which includes the lenders’ fees and other services.”
Source: “Sometimes, Shopping Will Save Your Clients Money!” National Association of REALTORS® Economists’ Outlook blog (April 25, 2017)