'TIS THE SEASON-TO BE CAREFUL © 2012 by Wayne D. Lewis, Sr.

           

            Your home is on the market.  Best wishes the in the sale of your home.  During the holidays, your home may become a magnet for those who have intentions to commit a criminal act.  This is just a friendly reminder to be on guard and vigilant for any unusually friendly buyers who seem to only come around when you are arriving home, or leaving.  Or, be careful of those who knock on your door and just want to take a quick look because they are on their way out of town and can’t set an appointment for the next day.  I could speak to you on so many fronts today regarding protecting your home, but we will just focus on your home during the holidays.

            We will focus on your home, and how, when it is on the market, it becomes a magnet for those who have intensions not necessarily to buy, but to steal and/or rob us of our valuables and livelihood, using the holidays as a pretense. Below are a few tips to be aware of when listing your home during the holiday season.

http://www.streetdirectory.com/travel_guide/60571/home_security/how_to_secure_your_home_while_trying_to_sell_your_home.html

 

1.      Limit the times and the number of groups, or people who can see your home. For example: Maybe Saturdays or Sundays between 2p.m & 4 p.m. or 11a.m. and 2p.m.

2.      Ask your agent to screen potential buyers very closely before setting appointments[1]. For example:       

a.       determine how long the buyer has been looking at homes;

b.      are the buyers working with an agent;

c.       how long has the agent been working with the buyer(s);

d.      Are the buyers looking to purchase soon or are they just looking:

3.      If selling a property FOR SALE BY OWNER (FSBO), you too have a duty to act with caution to protect you, your family and your property from those who may otherwise have intentions to buy a home. Here are a few pre-cautionary steps for you as well:

a.       Do not allow people to walk up to your home and ask to see your house without an appointment;

b.      If a potential buyer calls from your sign, have a pre-set of questions to ask before allowing them to come into your home;

c.       Ask if the potential buyer has an agent;

d.      Ask the potential buyer, what do they like about the area your home is in;

e.       Do not set up appointments according to the buyers first schedule, but according to your schedule- (Reschedule the appointment if you are not comfortable with the potential buyer, if they are serious, they will most likely reschedule as well)

f.       Always have someone at home with you when showing your FSBO property

g.      Answer questions only about the sale of the property and no personal questions about you or your family (when are you moving, where are you going, etc);

4.      Whether selling your home with an agent or without, here are some other practical things to do while your home is on the market:

a.       Put pictures away of family members;

b.      Put away jewelry, mail, and important papers;

c.       Have an outline of what you are, or not including in the sale, such as appliances, light fixtures or window treatments;

            The key to remember when your home is on the market, especially during holidays, is that someone maybe watching your goings and comings. Be careful putting out boxes on the curb that indicate you bought some expensive items, and that for the most part, while your home is on the market during the holidays, that item is somewhere in your home. [2]

http://www.gaylordsecurity.com/home-security-center/security-tips/selling-your-home-make-it-a-secure-transaction/

            These tips are not an intent to frighten anyone, but during the holiday seasons, thieves do their best work. They depend on us to be focused on many other things. And while our homes are on the market, we would like to believe that the only ones that are looking at our homes are potential buyers, but potential thieves are also at work. Here are a few more tips that may benefit you and help you stay safe while your home is on the market:

1.      Use your security system (protect your pass code-do not write it next to the keypad);

2.      Lock your doors (home and garage) and check each after showings are completed;

3.      Do not leave keys by the entrance doors or in the doors of your home;

4.      Keep children in doors after dark, or be outside with them during the holidays;

5.      Do not block doorways with moving boxes, this may make it easy for someone to hide behind after a showing is over;

6.      Have a code word or hand gesture to share with your children and family members if something is wrong but it can’t be stated if danger is near;

7.      If your home is broken into while on the market, let your agent know immediately after notifying the police;

8.      KNOW THE NUMBER TO 911!

             These tips are just a few reminders of how important it is to be vigilant during the holidays, and of course at all times. Your home is one of your most treasured investments. But your home is not more valuable than you and your family’s safety. As you prepare to sell your home, continue to focus on having a truly enjoyable Holiday Season. But also, continue to focus on the safety of your family. Best wishes, and Happy Holidays.

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[1] No screening activity shall be to violate any constitutional right to prohibit a potential buyer from purchasing a home regardless of race, religion, familial status, sex, sexual preference, nationality or any of the prohibitive acts forbidden by law-http://www.civilrights.org/fairhousing/laws/federal.html)

 

 

[2] Links included in blogs, unless specified, are not product endorsements.

 

CONFIDENTIALLY SPEAKING © 2012 by Wayne D. Lewis, Sr.

 

            The home buying process will involve the disclosure of hundreds of pieces of information about the buyer and/or the seller.  From credit reports, loan applications, to addresses and phone numbers.  In many cases, much of this information will be disclosed inadvertently, and in other cases, such as a credit report or social security number, this information will be disclosed to 3^rd parties necessary to the completion of the sale of the property. 

 http://www.realestateabc.com/answers/disclosures.htm

          The home buying process also involves the disclosure of information that while not confidential on the surface, may be held in confidence in order to protect the buyer and/or seller so that their position throughout the home buying process is not compromised.  Confidentiality is vital to buyers and sellers, and they each depend on the real estate professionals involved in the home buying process to protect their clients’ confidentiality to the highest.  Why is this important?

           From my prior background in Security, and working in a hospital, I understand the need to protect vital information.  From investigations that I was privy to, or that I’ve conducted, to patient confidentiality, where a patient’s identity was not to be revealed, nor their medical condition be released, confidentiality has always been an integral part of my background. 

          Today, confidentiality is no less the lay of the land when it comes to protecting a client’s information.  Clients often share vital and private information believing that their agent, their lender, and or their title representative will not disclose any personal information about them.  As real estate professionals, we understand how extremely important it is to hold on to very important confidential information for our clients.  How do we do it?

 

http://ezinearticles.com/?The-Duty-Of-Confidentiality-In-Real-Estate&id=398545

 

         First of all, as Realtors, we are bound by our ethical requirements.  We are prohibited from disclosing any information shared with us confidentially by our clients.  Secondly, we also present our clients with an agency disclosure.  This disclosure spells out our responsibilities to clients, and customers where we also go over what is required by the Louisiana Real Estate Commission on how to maintain and spell out our responsibilities as real estate agents.

        Throughout any sale of real estate, agents are aware of the demand for information on their clients.  But we are always mindful of what we can share, and when we will have to redirect those seeking our clients’ information to use other avenues, including sending those sources directly to our clients themselves.  Most often, real estate agents, lenders and title companies generally are the ones requiring the most information, and for that matter, have a direct connection with the buyer or seller.  But through the course of the sale, it is possible that one of those entities may make an inquiry, and that inquiry will have to be referred to the client for the information that they are seeking.  It is not worth the risk to share confidential information on our clients, no matter how small or seemingly slight, regardless of who is seeking that information.

http://www.legalzoom.com/everyday-law/home-leisure/ghoul-disclosure-must-home-sellers

        It is not unusual for clients not to want to disclose information that they deemed confidential, even if protected by law.  And, if it is not protected by law, we are bound to protect that confidentiality.  When we talk about things that are protected by law, there are certain things that aren’t protected.  For example, the fact that someone died in the house is not something that  necessarily has to be disclosed. Or, the fact that a house may have ghosts, or that someone lived in the house with a high profile disease or illness, is not something that needs to be disclosed, by law (consult with your Realtor or attorney for confirmation).  In the sale of their home, for example,  a seller has the right to protect their investment.  But by the same token, a buyer has the right to know of a material defect in a property that would ordinarily affect the peaceful enjoyment of their purchase.  The law speaks to these issues, although the law’s position may vary from state to state.  Federal laws may also have an impact on what a real estate agent and a seller or buyer may not disclose and keep confidential. 

http://www.ehow.com/about_5084974_real-estate-disclosure-laws.html

      The bottom line is, whatever our clients’ need for confidentiality,  as real estate professionals who represent buyers or sellers, we need to insure that we take all proper precautions in protecting our clients when it comes to giving out or maintaining their information.  Confidentiality of a client’s personal information is constantly being threatened by sources not necessarily or directly needed to complete the sale.  An experienced agent will know how to deflect those trying to seek confidential information on their client. If more information is needed, discuss with your respective real estate professional or attorney.

 

      (Not intended to be legal advice.  Links are not intended to be endorsements)

 

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Do you have 2 Nickels to Rub Together? © 2012 by Wayne D. Lewis, Sr.

Do you have 2 Nickels to Rub Together? © 2012 by Wayne D. Lewis, Sr.

Imagine a client who lives check to check, makes approximately $2000 a month.  Now, imagine that client paying $1100 a month rent, and $500 a month in food and expenses. At $1600 a month, that is equal to 80% of their income with $400 a month for discretionary spending.  At $1100 a month rental, that is equal to 55% of that client’s income.  This sounds like a recipe for disaster.

For someone earning $2000 a month income, the recommended ratio of a house note or rental would be 28%, or $560.00.  Putting that in perspective, in New Orleans, that translates possibly to a 1, maybe 2 bedroom rental.  But there is something to be said for paying $1100 rental for at least a year or more.  Your lender may verify, but if you are paying $1100 a month and you are on time with your other bills, you may have demonstrated your ability to reasonably maintain your credit, and having paid your monthly rental consistently. 

Your lender can conduct a credit check to see how you qualify, but it’s possible that if you are paying better than 50% of your monthly income, that you are qualified for a number of first-time home buyer programs.  The ratios that are required to buy a home are 28% and 36% (a conventional loan) with the 36%  going towards total home expenses including the house note.  See more at FHA guidelines: https://www.fha.com/fha_article.cfm?id=195

 

DEBT-TO-INCOME RATIOS

For your monthly income, at $2000, you could be paying a minimum of $560 (28%) or  towards your note, and total of 720.00, principal and interest.  There is some room to allow for escrow, but that room is determined by your lender, who looks at possible overtime, any bills that you maybe paying off soon, or maybe there are sources of income that can be added to address and improve your chances of qualifying for a home.

http://financeauthority.org/programs.shtml

FIRST TIME HOME BUYER PROGRAMS-

Often, we hear about First Time Home Buyer programs and wonder what makes them attractive.  For the first time home buyer, particularly here in Southeast Louisiana, there are often incentives.  Those incentives can be anywhere from 3% to 5% in closing costs assistance.  Or, as in the case of the New Orleans City Soft Second program, it is possible for a First Time Home buyer to receive up to $65,000 in Soft Second funding, and up to $10,000 in closing costs assistance.  These incentives are possible for the First Time Home Buyer providing that he/she completes a minimum of 12 hours of home buyer training.  There maybe other incentives including within the training, such as credit counseling, and how to manage your finances.

http://local.youngmoney.com/Whats_Dangerous_about_Credit_Repair_Louisiana-r1211748-Louisiana.html

There are also bond programs that are offered.  These programs may have their own requirements, so check with your lender to see what they are.  Not all lenders access bond programs or First Time Home Buyer Programs.  Before allowing anyone to run your credit, screen them for the services that they offer.  You may also want to screen lenders to see how easily you can communicate with them as they go through the home buying process.

http://homebuying.about.com/od/buyingahome/bb/buyhome.htm 

The drawback, or penalty is that if you take advantage of these great programs, you are required to stay within the home you buy for a minimum time period.  That usual minimum time period is five (5) years.  Your circumstances may vary, consult your lender.  Should you fail to honor the terms and conditions of these programs, you could incur as much as 6% penalties, or whatever is stipulated in your package. 

 

WHAT IS THE POINT?

 

The point of this message is to let you know that, short of having extremely bad credit, it is possible that you may qualify for a home loan.  Even with bad credit, you have an opportunity to rebuild your credit.  There are non-profits out here that offer credit building opportunities.  Once you have met the criteria that they have set aside, you are able to return to the arena of home buyers, able to buy your dream home.  Remember to do your homework.  Ask questions.  Assume nothing.  Just because you may have 2 nickels to rub together, don’t fall for the first program that becomes available.  Your goal is to always 2 nickels and more to rub together.

http://neworleans.la.mykeycreditrepair.com/

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TWO HOUSES & TWO NOTES © 2012 by Wayne D. Lewis, Sr.

Please see my other posts at: www.richfitusa.com

 

Unless you are an investor, having 2 house and 2 notes is nothing short of scary.  Many homeowners find themselves trying to avoid this dilemma when trying to buy one house and selling another.  The time frame has to be just right, or, 2 notes will be the challenge that they will have to falter through.  How does it happen, and can it be avoided?  Let’s discuss.

How does it happen?

Many homeowners, for whatever reason, have to move during their lifetime.  Gone are the days of staying in one house for over 50 years.  While it still happens, it is happening more rarely.  What we find is that homeowners are staying in their homes under 10 years on average.  There is either a job transfer, a family is growing, or a family is shrinking.  And sometimes, there is a change in the neighborhood, it becomes overgrown with crime, or the dynamics that brought a homeowner to a neighborhood has changed, where the neighborhood just isn’t quite the same.  In any event, the decision to move becomes inevitable.

Current homeowners know that it is a balancing act between selling their current home and buying a new one.  They absolutely don’t want to have to pay 2 notes on 2 houses. The question is: Which one do you do first?  Perhaps other experts will differ with me, but I don’t think there is a magic solution.  Why?  Because there are so many factors at play.  Obviously, there is the need to prepare the house that is currently being occupied while looking for the next house becomes an outright challenge if for no other reason, the rest of your life continues on as well.  And don’t let there be a situation of trying to avoid a 2 notes and 2 houses when one house is 100’s of miles away from the other. 

How can we avoid 2 houses & 2 notes?

A.  One consideration that Mr./Ms. Homeowner may take into account is selling their first home, putting everything in storage, renting a home until they find another home.  Then, they would buy their next home, possibly breaking a lease, or paying out the least in advance, and then getting their things out of storage.  But that may cost more in the process that it’s worth.

B.   Another consideration that some homeowners may take into account, albeit begrudgingly, is to rent the current house for a year while still having it on the market.  That way, an income is being produced while the owners become acquainted with their second home.  This works best if you have a property manager.  Or, you can choose to travel back and forth to address issues associated with renting your home.  Additionally, if your home is on the market, your Realtor® will play an important role as well in showing your first home to perspective home buyers.

While renting the current home may help with the first note, it should also address any potential repairs.  So make sure that the rent exceeds the current not by at least 10% a month.  You may also want to check with your neighborhood association regarding renting your home in certain subdivisions, as this may violate some covenants. Some Homeowners Associations sometimes impose violation fees.  Renting is an option for some, but not everyone. 

C.  Many homeowners want to play their cards right down the middle.  They want to chance putting their home on the market and finding the perfect home and hoping that one transaction can be coordinated well enough to offset the other.  Have I overused the word “rarity” or any form thereof? 

The homeowner who is interested in selling and buying, almost simultaneously is virtually orchestrating/pleading, and in some cases, demanding that everyone is doing their part to make this happen.  That is a big demand, and given the interaction of humans in general, good luck with that.  But it can happen, and here are a few tips to try to get this to work:

1. When the homeowners have decided to sell their first home, put it on the market immediately.  Get the Realtor® on board, and let him/her know what your plans are.
2. If the homeowner is going to move out of town, say over 50-100 miles, or across country, find out from your Realtor® if their broker works with a network of Re-lo companies.  If so, this will facilitate the process of locating the next home.  If the move is across town, or under 50 or so miles, your Realtor® can network with a local company if their company does not have branches in the area that you are moving close to.
3. Mr/Ms Homeowner have now put their house on the market, to sell.  That means, at the best possible price that homes are selling for in their immediate area, not 10 or 15% above the market.  AT MARKET VALUE.  By doing this, the house will get more showings, and possibly, an offer or offers will be made that the sellers can begin working.
4. Mr/Ms Homeowner are now positioning themselves to find their next dream home.  That means, working with their Realtor® (whether local or RE-LO), to fine tune their search for their next home.  It is important to let your Realtor® what it is you want exactly in your next home.  Most Realtors® know their inventory.  Almost to the exact amenity, many Realtors can practically take you to the house that you have described.
5. When you locate the house that you want, move on it.  Don’t hesitate.  Stop searching!  You have found your house, write your offer.  But write it, subject to the sale of your current home.  And then, wait.
1. There is a delicate balance in writing this type of offer.  In Louisiana, it is referred to as a Predicated offer, or a Contingency.  In this case, you are asking another seller to take their home off of the market until you sell your first home.  This predication or contingency may require a higher deposit.  Something to assure the owner of the home you intend to purchase that you are serious, and that, should you back out, the 2^nd owner has something to address their concers.
2. What may also need to be in place for a contingency is the fact that there is an accepted offer on Mr/Ms Homeowner’s first property.  If there is an accepted offer, that means that a closing date can be referenced in the contingency or predication.  This helps to put the 2^nd homeowner at ease, but not necessarily without the higher deposit.
6. An accepted offer on Mr/Ms Homeowner’s house, all things be equal, will need to be moved along very carefully, honoring all deadlines and submission requests.  The important thing that will need to happen, is to practically set up the closing on the first house so that it doesn’t differ by more than 1 or 2 days of the second house’s closing. 
7. Selecting a title company on the sale of the second house that understands what you are trying to accomplish will also be key.  In many cases, in Louisiana, the buyer selects the title company, but through a means of communicating with the buyer of the first house, and the title company, along with communicating with the 2^nd title company, it will be like sheer magic, the ability to close one house, and then other within basically days, if not hours.

 What we have just discussed here is how homeowners can work to avoid having to pay 2 notes on 2 homes, especially if the homeowner is looking to buy another home while living in the first one.  We discussed selling the 1^st home, putting personal items in storage, and then renting another home until finding a desired home that we ultimately decide to buy. We also discussed renting out the current home for a year until the seller settles into their new home.  Finally, we discussed that if the seller works with the team involved in the buying and selling process, including their Realtor(s)®, the homeowners of the 2^nd home, the title companies and the buyers and sellers on both sides of the process, it is very possible that Mr./Ms Homeowner can avoid paying 2 notes on 2 houses.  Don’t forget, Make Your Best Offer.

 

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Where is Your Heart? © 2012 by Wayne D. Lewis, Sr.

Also Visit my blogs at www.richfitusa.com

 

For the first-time home buyer, the opportunity to buy their first home is truly overwhelming.  Even with someone holding their hand, or with a road map clutched in their little hands, buying that first home remains a challenge unlike any other.  Of the many questions that first-time home buyers are asked by their Realtor, one is: Where do you want to live?” 

The answers can range from near their parents, close to their jobs, in the suburbs, close to school, or, get this one: “Anywhere, I’m not particular.”  Sometimes first-time homebuyers will give their agents 4 or 5 different locations to select from.  While that is not a bad thing, the real question is, where, more than anywhere, would a first-time homebuyer like to live?   

Getting first-time homebuyers to narrow down where they want to plunk down for a few years is a challenge, and for me, I thought if I could put it in terms of where they grew up, or why they are deciding to buy a home at all, it would be helpful to me to help them find their dream home.  So, I often ask many first-time homebuyers when they don’t seem to have it narrowed down:  “Where is your heart?”  After they get over the idea of the question, I follow with what moves them to move?  I follow up with a question of what would make their move a perfect move, to the perfect house.

While these questions don’t necessarily result in an epiphany where the first-time homebuyer just comes up with the ideal location, I do share with them that the areas that they have presented to me for consideration aren’t necessarily consistent, or that they are very broad.  I point out to them that my job to help them would best be accomplished if they could say exactly where they would like to start looking for a home.

I understand the challenges for first-time homebuyers in trying to make this important decision of where to live.  When my wife and I began looking for a home, we had no idea of where to look, so we just followed “For Sale” signs.  The disappointments were in the affordability of the homes, the lack of understanding of what was needed to buy a home, besides money, and knowing that we were going to find a great neighborhood to raise our family. 

As I think back, I remember Jane Lampkin, who was our agent.  She was wonderful.  She showed a number of houses, helped us to get financing, and explained a lot of things to us to get through the process.  At a point where we were disappointed in the selections, one day Jane called us and asked us how would we like to own a brand new house?  We were excited, and of course said “Yes!”  The property was located in New Orleans East, along the outskirts of New Orleans called Littlewoods.  Although I had gone out in the area to visit friends, the area never captured my interest, until my wife and I were looking at blueprints, and plat maps of where the house was going to be built, in a new subdivision between Morrison Road and Curran Blvd near Paris Road.  We fell in love with the idea of a brand new home with appliances, vaulted ceilings, stone fireplace, a porch, indoor laundry and so many other great things about not only buying a home, but owning our very first home.

When I ask my clients today, “Where is your heart?”, it is at that point that I am trying to detect a glimmer of anticipation, or excitement over and above that which they maybe going through already.  I am looking for, in their eyes, something that gives me a clue as to what would make their home buying opportunity as positive as possible.  If I am lucky, they will say something, or do something that will give me a clue as to what direction to move in while helping them successfully go through the home buying process.

If I don’t see, or sense anything right off, then, I have to be like Jane Lampkin was to us.  I have to seize the moment, guide them by their inexperienced hands, and show them the best of what is available in their price range.  It becomes a hit and miss at first, but I am always checking with my clients to see if I am warm or if I am cold regarding their likes or dislikes.  But eventually, it clicks.  They confirm by their choice and selection of a home, by their willingness to follow my guidelines within the process, and eventually by the referrals that I get from them for a job well done.

Maybe it is not a question that can easily be answered by a first-time home buyer to a stranger, a real estate agent, whom you don’t know.  Maybe it isn’t the kind of question an agent should be asking a buyer.  But if we are going to be spending at least 30 to 60 days together to help you achieve a life-long dream, shouldn’t I at least know where your heart is pulling you to live?  By the way: “Where is your heart?”

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Making Your Best and Final Offer or BAFO © 2012 by Wayne D. Lewis, Sr.

            It is referred to as a BAFO in contracts for bids. And true to form, an offer to purchase a home is a written contract, or a bid to buy someone’s home.  It is a phrase that sometimes surprises buyers, perhaps even, real estate agents.  Why? For one of two reasons.

1.      All of a sudden, a house that has been sitting on the market for an inordinate amount of time, is all of a sudden in demand.  There maybe one other buyer, or maybe as many10 or more offers (called multiple offers) on the table who have each put in an offer on an otherwise unassuming home on the market. Or, there is a house in a demand area, that as soon as it hits the market, every agent, every potential buyer, or even unintended buyer, races to be the first to put in their bid or offer to purchase this home that was just listed. 

2.      Or, there could be a situation when a seller or buyer believes that he or she has an upper hand in a deal, for whatever reason, even if there is no other offer on the table.  At such a point, the seller or buyer throws down the phrase that puts the other in a position least desired: “Make your best and final offer.”

http://www.businessdictionary.com/definition/best-and-final-offer-BAFO.html

            From an agent's perspective, it requires that their client understands that in either of the above cases, their client has to weigh their options as to whether to increase their offer, hold firm to their previously submitted offer, or retract their offer all together.

            Multiple Offers: Multiple Offers - Competing Home Offers

            Competing With Other Home Buyers in Multiple Offer Situations
http://homebuying.about.com/od/offersnegotiations/qt/071207-MultOfrs.htm

            Of the two probabilities mentioned above, neither excludes the possibility that a buyer/seller will necessarily have the final advantage by taking such a position.  In this discussion, we are focusing on the decision itself to make such a statement and the options that it presents.  While either side can make this statement, for the sake of time, we will focus on the buyer who has been issued this challenge.  The inverse would more than likely hold true for a seller, all things being equal.  Here is what we need to consider:

 

            A buyer who had submitted an offer on a house (whether in demand or that has been on the market for a long time) should be able to make a generally sound offer on a property that they are interested in purchasing.  The buyer has done their homework, however deep, or superficially, their offer to buy is, for the most part, a sound offer.  What may have happened is that the seller has some type of reason for not accepting the original offer and decides to counter.  One reason for the counter could be the mortgage to be paid off, or the Return On their Investment (ROI) or, maybe, the seller is trying to get more out of the deal.  We can’t always conclude that it isn’t any one of, or several of the reasons above.   But, we know that the seller has countered.  Sometimes a counter offer may lead to an extensive amount of negotiating back and forth.  Sometimes the negotiating could last a week, depending on how many people are involved, or the terms and conditions that are being hammered out between the buyer and seller.

            Many people are put off by the back and forth of negotiating terms, are often put off by even a counter offer.  But for those who are willing to stick it out, it could be rewarding.  But at some point all good negotiations have to come to an end.  Someone ultimately decides that they have had enough, because their terms are rock solid, and that they are not willing to negotiate any further.  Suddenly, let’s say for example, the seller decides that they have agreed to enough terms and conditions, and that they (seller) are getting less out of the deal for their property.  The seller decides that if the buyer wants the property, and that if the buyer is willing, that the buyer should be willing to make their best and final offer.  (This scenario is for explanation purposes only, your situations may vary).

 

            In this instance, the buyer, having been given this challenge to make their best and final offer, has to decide on how much they are willing to give away from their original offer.  For many of those in this position, they may see this as a challenge to their serious ability to purchase the property, and may try one last ditch effort to get as much out of the deal as possible.  So they, in fact, make their best and final offer. The outcome varies.  There are no statistics on this that I can find.  But for those who make the effort, they have no reason to be ashamed if their best and final offer is not accepted.  The process of negotiating is a brutal one.  One burns many brain cells trying to get to that ultimate bottom line.

 

            On the other hand, the buyer, having received the challenge to make their best and final offer, may feel intimidated, or offended.  After all, things were going well for the last week r so of negotiating. Why would the seller pose making the best and final offer at this point of negotiations?  From the buyer’s point of view, it could be a case of asking too much of the seller, and now the seller is pulling back. Or, the buyer could feel that the seller is trying to push them aside in order to get to another deal.   This phrase, in its entirety, suggests so many things within the process of negotiations, and yet, it simply means one thing:  Make your best and final offer.

 

            Whenever on the receiving end of this challenge, the buyer should not feel compelled to offer more than their initial offer.  Sometimes, it could be a gimmick, or a trick to get a buyer to offer more.  But if the buyer has done their homework and research, they should know that they have already made a great offer.  If for example, the buyer offered $100,000 from the beginning, and eventually find that through the negotiating process that they are at $25,000 or more above where they first started, maybe revisiting why the $100,000 was not a bad offer to begin the process should be considered.

 

            Last but not least, if facing the challenge of making your best offer after some time of negotiating back and forth, step back from the negotiations for a while.  You usually have a deadline in order to respond.  Use that time.  Don’t respond too quickly.  By stepping back, especially as a buyer, you give your mind an opportunity to think, and re-think about how you structured your offer in the first place.  The end result will not necessarily guarantee that you make a successful purchase, but when all is said and done, you should be able to walk away from the negotiations secured in the knowledge, that you made your best and final offer.

 

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How Not to Loose Your (Real Estate) Deposit (C) 2012 by Wayne D. Lewis, Sr.

Previously Posted at: www.richfitusa.com in 2011

 

As a First Time Real Estate Investor, there are at least three (3) things you will want to remember regarding your deposit in order to ensure that it either goes to the sale of the property, or that you get it back in the event that you don’t purchase the investment property. They are:

1. Read and understand the contract the Agreement to Purchase before you sign it
2. Pay attention to deadlines and timelines within the Contract
3. Do not destroy or deface property before you actually own it.

First of all, the Louisiana Agreement to Buy or Sell is approximately, if not exactly, 349 lines of reading. The information is literally there to be read, prior to signing. If you are going to be involved in  Real Estate Investing, ask your Realtor to provide you with a blank copy so that you can read it without the blanks being filled in. Make notes on the form, and have an idea of what changes you can make, as needed. Those changes can be made on the blank lines contained within the contract, or they can be made on an Amendment form, which you can also request of your Realtor. Please consult with your Realtor regarding the changes you would propose, as each set of circumstances differ.
Failure to misunderstand the language may result in a First Time Investor acting inappropriately with respect to the conduct of the contract, such as claiming ownership before actually having closed on the property. Not being familiar with the language of the Contract could result in a First Time Investor claiming ownership to the property by ordering work to be done on the property that becomes incomplete, or not paid for, resulting in a lien being placed against the property. Such an improper lien would go against the seller, for which they could be sued. As Investor, your deposit has potentially been put in jeopardy.

Secondly, in reading the contract note that there are deadlines included in the contract. I’ll point out one (1) of them right now. For example, lines 39-41, there is a stipulation to closing, on the 1^st page. If the 3^rd of June is a proposed closing date, the 3^rd of June is the latest you should be prepared to close, or go to act of sale. Any later than that date, and there has been no arrangement between the Investor and Seller by way of an Amendment to the initial contract, as an Investor, you have just put your Deposit at Risk. If you anticipate any changes to the date of close, contact your Realtor, and make sure that the Seller is well informed.

One important reason to notify the Seller of any changes in closing is that many Sellers come from out of town to close. If they arrive in town to close, they may have made arrangements to leave the same day, or the next day. It may cost them, so, as an Investor, it may cost you. So please pay attention to deadlines.

A third factor that could result in an Investor loosing their deposit, is attaching, affixing or repairing anything to the structure before close. Those attachments and repairs go with the property. Should the Investor not be able to close on the property, any and everything done during the contract period is the seller’s. Additionally, if an inspection of the property is conducted by the Investor, be sure not to cut, break off, or otherwise damage the property, as such an act could result in the loss of deposit as well. 

Note:  The information that I have shared with you throughout my blogs is based on inferences as it relates to Louisiana and may vary from state to state. You are advised to consult with your Realtor or attorney regardless of your state of origin or wherever you are conducting your investment activities.
For additional reference, I thought I would include the language from the LA Real Estate Commission approved as revised (01/01/11) Agreement to Buy or Sell Contract form. This is what you, as a Real Estate Investor, should familiarize yourself with each time you propose to buy, or even sell your properties. It reads as follows (Line #’s 228-232:
DEFAULT OF AGREEMENT BY BUYER: in the event of any other default of this Agreement by BUYER except as set forth in lines 103 to 122, SELLER shall have at SELLER’S option the right to declare this Agreement null and void with no further demand, or to demand and sue for any of the following: 1. Termination of this Agreement; 2. Specific performance; 3. Termination of this Agreement and an amount equal to 10% of the Sale Price as stipulated damages.
Lines # 234-236 go on to state: Further, SELLER shall be entitled to retain the DEPOSIT. The prevailing party to any litigation brought to enforce any provision of this Agreement shall be awarded their attorney fees and costs. The BUYER may also be liable for Broker fees.

FULL PRICE OFFER? BEWARE! by Wayne D. Lewis, Sr.

Previously Posted at: http://www.richfitusa.com



It is a highly anticipated move: A FULL PRICE OFFER! For the buyer, it means a tremendous opportunity. The buyer is cutting to the chase, they are offering the seller of their property a full price offer. To a seller, it is PAYDAY! Load up the truck and move to Beverly---Gardens, Road, or wherever the seller anticipates moving to. But whoa your horses! Waaaaait a minute! Did you read not only the fine print, but the full print as well? Is this really a full price offer or, are there a few caveats, quid pro quos and contingencies that the seller needs to be aware of and agree to? Most likely. There exists that probability. And, there should be an extra eye to be sure that a full price offer is without any unsuspecting requirements, demands or concessions on the seller. What could those concessions be?

Some of those concessions may have to do with occupancy; purchaser fees; inspection time; waivers; disclosures, or taxes. These are just a few things that could be a potential pitfall to be on the look out for in a full price offer. While an ideal full price offer would be a cash one that closes in possibly2 weeks, no inspections and a quick claim deed. It could also be appreciated if the financing was a 20% fixed-rate loan, and a close in 30 days. Well, dream on, because those possibilities are becoming almost a thing of the past. Let’s talk about some of the realities of a full priced offer and what to be aware of.

Sellers of a 4 bedroom 2 ½ bath 3000 square foot home with an in ground pool accepts a surprising and welcomed full price offer as bought to them by their Realtor. The first confirmation is for the sales price, but the Realtor does advise the sellers there are conditions. The sellers can’t imagine what conditions that a full price offer could have that they wouldn’t accept. The Realtor further advised them to allow him to meet with them. They agreed. Here is what they learn:

• Sales Price: $300,000.00
• Deposit: 50% of the required 10% : ($300,000 X 10% = $30,000 X 50%= $15,000) upon successful completion of a satisfactory inspection.
• Inspection: 30 business days
• Seller agrees to pay 3% of purchaser’s closing costs. (FYI: 3% of loan amount ($240,000) is equal to: $7200.00 (Loan Amount is the amount left after 20% required down payment)
• Application for loan: within 10 days after purchaser and seller acceptance
• Terms and Conditions:
  • Sellers agree to allow purchaser to move in 15 days before closing at a prorated rental rate of $50.00 a day (Based on proposed $1500 monthly rental)
  • Sellers agree to leave chandeliers in foyer and dinning room (Appraised Value-$2,500).
  • Sellers agree to replace Kitchen appliances for models of similar or greater value before close or an appliance allowance of no less than $$7500.
  • Close date September 30, 2012 (86 days from now)
  • 24 hours for sellers to consider

This information is somewhat exaggerated, but not far from a possibility. A full price offer sometimes may suggest to purchasers that if they are going to pay a full price for a home, then, the seller should be willing to make some type of concession. While that maybe the case, the seller has overhead and responsibilities as well.

In this particular case, the seller needs to evaluate the information to see if there is going to be an economic impact to their anticipated bottom line. If, for example, the seller has a remaining mortgage of $210,000, any terms suggesting seller concession will be an added expense from the total $300,000. That means the sellers have fees that have to come out the $90,000, plus what they will need towards the purchase of another home.

With an anticipated $90,000 to work with after the mortgage is paid off by the seller, the purchaser is asking for $7200, that leaves $82,800. The sellers then have to subtract an additional 6% commission for the Realtors, or $18,000. Then, the purchaser is asking for an appliance allowance of $7500. So, on a full price offer of $300,000, where the sellers are looking to walk away with $65,000, they appear to fall short . There is also a possible $1500 directly back to the seller for allowing the purchaser to move into property early.

ARE BACKUP OFFERS MAKING A COMEBACK? © 2012 by Wayne D. Lewis, Sr.

Previously Posted at: http://richfitusa.com/

BACKUP OFFERS, they are absolutely no guarantees, but it is amazing how more often than not, Backup Offers seem to be moving forward more frequently. There was a time when someone would make a Backup Offer on a house on the market, and the Realtor would have to bring the bad news to the buyer, that the deal had closed on the original contract. Now, Backup Offers are making an apparent rise, by this Realtor’s perspective.
It seems that now, the original contracts are carrying less weight. Whether it was a change of mind, financing fell through, appraisal too low, or inspections revealed too much work to be done, original contracts are not the solid contracts that they used to be, and many Backup Offers are falling in place, with greater security. But certain things should be in place for the buyer of the Backup offer as well, if a Backup Offer is going to pay off (consult with your Realtor for further details). Here are some suggestions (your situation maybe different):
 Cash/Financing

1. Know the deadlines of the current contract
2. Try to obtain any current inspections from the seller (may require a fee)
3. Deposit
4. How much to offer
5. A property Under Contract for an extended amount of time could indicate a return to the market.

First of all, after submitting a Backup Offer and it is tentatively accepted, if the buyer is paying cash, it would be important to secure that cash for a given period of time. I suggest putting it in a savings account for at least 30 to 45 days, or as long as the buyer is willing to wait to see if and when the original deal either closes or falls through. Financing is a different set of issues, but the principal of protecting your ability to move forward and buy is paramount if that original deal falls through. On the front end, when looking at putting in a Backup Offer, and financing is involved, be sure that your lender has you in a ready-set-go position in the event the 1^st offer falls through. Your letter of pre-approval will be needed to go with the Backup offer, but additionally, we know that pre-approval still doesn’t mean you can buy the house. Use the time between submitting the Backup Offer to work with your lender to make sure that nothing on file will keep you from buying your desired house should it come back on the market.

Secondly, and this is not in a particular order, find out any deadlines within the original contract. From the moment a contract is written, there are a number of deadlines that the buyers and sellers have to meet. From the inspection to loan approval, to appraisal, all have certain timeframes in which they will need to be accomplished. Knowing, for example, that the original inspection may take 15 calendar days to be completed, and that there are approximately 72 hours for the seller to respond, and additional 72 hours for the buyer to accept what the seller is committing to, helps the buyer on the Backup Offer to determine whether or not they want to stick with the Backup offer. So, try to find out where the current contract is, where it does not infringe on, or compromises the current buyers’ or sellers confidentiality.

A third suggestion is to see if there is a current inspection on the property. Sometimes, a property may have been inspected before, either by the seller when they decided to put it on the market, or by a previous buyer. The request for an inspection report should not interfere with an existing offer on the table. If the sellers are willing to provide any previous inspection report, the inspection report should be at least within 6 to 9 months, to be sure that the buyer can have an idea of what they maybe getting into. A fee maybe charged by the seller. Note that receiving such a report, does not exclude any buyer from obtaining their own inspection/inspector. Wherever possible, obtaining a prior inspection gives the buyer in the backup position, an opportunity to determine how to move forward, should the current offer fall through.
Fourthly, the deposit. I personally, and professionally, discourage putting a deposit down on a Backup Offer. Why? Chances are slight, perhaps even slim, that the deal will fall through. And while I point to the increase of Backup Offers rising, here are 2 reasons why you shouldn’t put up a deposit.

1. Your offer may not be the only backup offer. In many cases, there maybe only 1 backup offer, but don’t bet on it, not just for this reason, but other reasons as I will discuss later. Your deposit can be a promise, depending on your addendum structure to the Agreement to Purchase (LA). The option is either to, or not to, pledge a deposit, but there is an indication of how much a deposit a buyer will be willing to put up if their offer is compared later by the seller. So, putting up a $500 deposit compared to say a $2000 deposit indicates to the Seller that you are truly serious about buying their home.
2. Your deposit will take anywhere from 1 to 2 weeks to be returned in the event you decide to resend your Backup Offer. Better to promise a deposit and not have to wait. Also, it would help if you didn’t have to wait for your depositi in the event you decide to put an offer on another house, where you, as the buyer, are the primary buyer and not the Backup.

The 5th suggestion to consider when putting in a Backup Offer on a desired property, is how much to offer. Very rarely, hardly ever, is it known how much the primary contract is for. My guess is, in case the initial contract falls through, the seller does not want to show their hand as to what they accepted. When putting in a Backup offer, make YOUR best offer. Your best offer maybe the Sales Price/Asking Price, or it maybe the Market Price, which maybe less than the Sales Price. Or, your offer maybe over the Sales/Asking Price and/or the Market price in order to gain an upper hand on any potential offers that are being submitted, or that may come in during the initial contracting process. Consult your Realtor and Lender, because your pre-approval amount should match the amount you are offering, even if in a Backup status.

As a bonus, let me share this with you, as a sixth suggestion: if you are in the market to buy a home, I encourage you to make your move as quickly as possible on the house that you most truly want. Whether it is a Buyer’s Market, or a Seller’s Market, MAKE YOUR BEST OFFER! And if you see a house that you decide to put an offer in on, find out if any offers have been rejected, see if you can find out what previous offers were submitted and turned down. Even if the house you are interested in is under contract, this bit of information can help you in making a good Backup Offer. Or, if a house has been under contract for a long time, there maybe a reason that the house is sitting under contract for so long. Have your Realtor contact the Listing Realtor to see if there are any cracks in the contract that the house might be going back on the market and if there are any Backup Offers on hold.

Each of the above ideas are suggestions, but are not a substitute for homework when looking to buy your home. Consult with your Realtor, your lender, others who have recently bought a home, or go on line to see what are some of the best ways to put in a Backup Offer. Good luck, and as always, MAKE YOUR BEST OFFER!

THE DEAL FELL THROUGH! © 2012 by Wayne D. Lewis, Sr.

Previously Posted:  http://www.richfitusa.com

Let’s face it, a Real Estate deal or transaction is going to fail or fall through. Someone is going to forget to order something, write something up, or something is going to be too late to the table. It happens, and unfortunately, it happens, perhaps all too often. To the dismay of everyone involved, a deal often becomes dead in the water, and can’t close for what can perceivably be, avoidable errors.

Errors, mistakes, faux pas, or whatever you choose to call them, they can cost thousands, if not millions of dollars in real estate losses. Knowing some of the instances in which these have occurred, or have been narrowly avoided can be a warning to everyone, and hopefully help anyone avoid lawyers, lawyer fees, and lawyer headaches. What are some of the things to be on guard for? Here is a short list, and I mean short, because this is only an overview that is intended to remind us to be very proactive when it comes to negotiating and moving forward in a Real Estate transaction.

How to avoid Costly Mistakes (Basic issues) in Real Estate Transactions:

1. Sign, Initial, date and time where necessary-The number of contracts that are missing signatures and initials that are required is fathomable. Too often, there appears to be a lot of rushing to sign papers to buy or sell a property. It appears as though those who are signing the document, are squeezing the act of signing into their schedule. Please take the time to read what you are signing, but more importantly, where required, initial the document, or this may cause a delay in the process, or provide a scrupulous seller or buyer an out to a contract.
2. Make good copies of originals-With advent of faxes, copiers and scanners and the like, originals become blurred or indelible, or just plain hard to read. Where possible, include the original document with the difficult document, even if it does not have all of the signatures. This will help others down the line to make sense of the intent of the document. Or, call forward to advise the person who is subject to receive the documents to be aware, and to call back for a clearer copy.
3. Document/record for your records - (Date, time, who said what, where and why) any antidotal information pertinent to the file-It seems insignificant if someone said that they sent something on Thursday, and a week has gone by. But during the buying and selling process, this small recorded statement may come back to bite you if you can’t recall that it was said, who said it, and when it was promised. Make a note in the file cover, or keep a journal of the activities that go on relating to the home buying process.
4. Keep a record/Keep a record in a set place- It is amazing, but everyone does not keep records. Everyone does not have a file, or a safe place to keep files. Have a set place to put your important papers. Not knowing where your papers are at a critical moment during the home buying process, it could cost you the deal.
5. Know all of the players (as many as possible) and communicate with them at least once during the process/document- How many people could be involved in buying and selling a house? A ballpark estimate: 100 people (depending on the type of purchase and if using a Real Estate Agent). Wherever possible, get to know who are the players. You may not speak to all of them, or need to speak to them, but be aware of the role that each group and/or individual plays in making it possible to buy or sell a home. That include the Title Company, the Appraiser, the Home Inspector to the Home Warranty company, who are just a few of those who take an active role in the sale of a home. Knowing each individual’s role helps you to understand where, if possible, your deal may have a problem, and how you can backtrack, if necessary, to minimize any damage(s) from occurring.
6. Any mistakes, or errors should be pointed out immediately and addressed, even if you are the one who made the mistake-Mistakes are not uncommon in a real estate transaction. From a failure to initial a change, to a failure to date a document, to a failure to address a repair in an amendment, mistakes can happen. Generally, those mistakes maybe overlooked, ignored, or addressed by either the buyer or seller. The question is when will that error or mistake jump out and create a problem? The worst time for an error to come up is at the closing table. It is at a time when the buyer(s) and seller(s) are ready to close the deal. An error that could have been addressed well before closing, with possibly no damages, or loss to be incurred, now becomes a big stick for the one the error favors. It is at this point the error, depending on the circumstances, could result in both parties agreeing to disregard the error and move forward, or to be compensated, right then and there, at the closing table, or someone deciding to take legal action.
7. Ask for clarification/or information as needed-assume nothing-A lot of documents are going to be signed back and forth between buyer(s) and seller(s) during the home buying process. While many professionals explain what it is you maybe signing, those professionals in their absent-mindedness, may ask you to sign a document using jargon that is exclusive to their profession. For example, “Please sign this SRT form, or this BBO2 form and will give you the right to do A, B, C.” As the one signing, you want to believe that no one would ask you to sign something that would harm you financially, and you may not want to look like you don’t know what is going on. But to be honest, you may not know what is going on, and you should ask your agent, lender, Home Inspector, or anyone else to explain more clearly what it is you are signing, using plain English.
8. Take note of dates and times in the contract and abide by them/Amend as necessary-Dates and times are included for a reason in contracts. Many people disregard these dates and times, believing that there are circumstances of a non-related matter that outweigh those dates and times, until someone presents them with a cancellation and failure to return their deposit, or request their deposit back as a buyer. These restrictions are there to help buyers and sellers to determine how serious the other is regarding the purchase and sale of the property. If one or the other is oblivious to the dates and times from the outset, the buyer or seller may cancel and move to another property.
9. Confirm funds- “Do you have the money?” Whether you are financing or paying cash, the seller in a real estate transaction wants to know if you have the means to purchase their property. If you are offended by this as a buyer, perhaps you should not attempt to purchase or buy property. Too often sellers take their homes off of the market under the presumption that the buyer has the means to buy their property. This is not to say that sellers have not confirmed whether the buyer could or could not buy, but that even with a confirmation, most often tentative, a seller can be lead to believe that a seller can purchaser their property. As quiet as it is kept, by the time comes to close on a deal, the lender could send a letter atthe last minute, indicating that they buyer cannot finance the deal, despite a pre-approval letter having been received. On the issue of cash, the bank could indicate that the buyer is unable to provide the cash because they either spent the money, or that the funds did not get wired in time from another source.
10. Confirm Taxes-If going through a lender, one of the forms that they provide a potential buyer is a form http://www.irs.gov/pub/irs-pdf/f4506t.pdf. You should be able to learn how long it takes to obtain a copy of your taxes for the lender. But a failure at all to file taxes, is a reason not to pursue buying a house, at least through a lender. This is not an endorsement not to file your taxes, but a reminder that by not filing taxes, that you, as a buyer, can cause a seller to loose valuable time, and perhaps seek damages against you as a buyer for tying up their property.

The above 10 points are not a total list of how deals can fall through. There are deals that may have fallen through due to illness, back taxes, liens, succession, and a host of other issues that can favor or not, the buyer or the seller. The real issue here is to make sure that as a buyer, and a seller, being proactive in the process to where regardless of the professionals who are involved in helping you to buy or sell a property, you are not abstained from responsibility for the outcome if a deal falls through.

There are anywhere from 50 to 100 people involved in helping buyers and sellers to complete a transaction that when it comes down to it, make take 30 minutes to complete at the closing table. A lot goes into making those 30 minutes or so go smoothly, and it takes a number of licensed, certified, and committed professionals to ensure that the sale goes off, without a hitch, and that the sale does not fall through. If you should take anything away from this article, don’t look to who can be blamed, but how to avoid situations that can cause a deal to fall through.

THE UPSIDE OF A LOW-BALLED OFFER © 2012 Wayne D. Lewis, Sr.

Previously Posted at: http://www.richfitusa.com

If you have had your home on the market for any length of time, you may have received an offer that was totally ridiculous. The offer probably may have had you seeing red. Your veins were popping out of your forehead. Chances are, you were so mad that someone would offer you so low an offer. The term we call it: A low-balled offer.

A low-balled offer, regardless of the terms, is often insulting to the seller. And if a Realtor representing the seller has to be the one to bring the low-ball offer forward, it is an uncomfortable position. Sometimes, the seller may become suspicious of everyone. They begin to wonder if someone is trying to take their property. So many emotions come out, and reasonably so.

No one, who is selling their home, is willing to give it away, literally or figuratively. Generally, homeowners are well informed and have made the best possible decision on how to price their home, especially if they have a Realtor involved. With that said, there can still be an opportunity for a homeowner to put a positive spin on a low-balled offer. How? Here are three ideas for you to consider, and why:

1.      Consider why the offer was made and who made it

2.      Look at the additional terms (Cash, incentives, deadlines, financing)

3.      What is your strategy for handling offers in general?

What is an example of a low-balled offer, and when are you likely to get it? A low-balled offer is not necessarily relative to how your home is priced, nor is there a fixed time for when someone may make a low-balled offer. Many times, a home that is just listed, will receive a low-balled offer from someone who just fishing to see if a seller is desperate. Right now, we are focusing on homes that have been on the market for an extended period of time.

While it is safe to say that your home may have been priced correctly for its condition 6 months ago, a low-balled offer is very likely to come your way. The buyer may be presumptuous that something is wrong with your house, or that for the most part, no one is interested in it, so they make such an offer.

For example, if your home is listed at $100,000.00, and you receive an offer for $30-$60,000 less, you have the makings of a low-balled offer. While I indicated earlier that a low-balled offer may come after your home has sat on the market for an indeterminable amount of time, you can also receive a low-balled offer the first day it is listed. A low-balled offer out of the gate is usually someone testing the waters. But I still want to encourage you to take a proactive position before dismissing any offer.

The thing to remember is that a low-balled offer maybe your first and only offer, so it is important that you have a strategy that treats every offer as though it is the best offer, because, it is an offer. Here are some suggestions for a strategy:

First of all, consider why the offer was made, and who made it. Does this mean for you to track the potential buyer down? Not necessarily. An offer made and written may give a clue about the buyer. Some of this information your Realtor maybe able to ascertain from the buyer’s Realtor, as long as it does not infringe on confidentiality. You may find out that the buyer is from out of town, or lives down the street. You may find out that the buyer used to live in the neighborhood as a child, or is trying to buy up every piece of property in the neighborhood. Or, you may not find out anything on the buyer directly, but there maybe other clues. Here area a few other signs to look for:

1.      How is the buyer paying- Cash or financing?

2.      If financing, how much is the buyer financing of the loan, 80% or 75%, or more?

3.      Whether paying cash or financing, how much of a deposit is the buyer willing to put up-$100, $500, $1000 or $5000?

The point behind these questions, rest in surmising the seriousness of the offer. For example, if the buyer is paying cash, does he want to close in 2 or 3 weeks? If they are financing, are they financing at 80% as opposed to 50% of the proposed purchase? These 2 pieces of information may indicate that the buyer is serious if he or she is willing to finance 50% of the proposed purchase and, wants to close in 30 days.

The buyer may also be serious on another front if their deposit is high, which suggests that they are willing to risk something for the right price. If the buyer is willing to put a $10,000 deposit on an accepted offer rather than $500, then you may have an opportunity to counter and to negotiate a price that you both can agree on.

Last, but not least, your strategy for negotiating a low-balled offer has to be better than outright rejection, or not responding at all. When your property has been on the market for more than 90 days, 6 months, or even a year, any offer that comes in, must be given some credence. The fact that your home is perhaps the nicest home on the block is no longer an assurance that it will set at the price that you set. Many of your property competitors are Short Sales, Foreclosures, Auctions, Bank-owned, Investor-owned, RELO’s and of course, sellers like yourselves. It’s nothing personal, but any offer today is going to come across your dinning room table with little regard for your feelings or, how much you have put into your homes. The best house on the market is the one that sells, even if for less than you, as a homeowner, want to sell it for.

An offer that comes is an offer that deserves attention, and should be countered, not rejected, because there are so many homes that are still sitting on the market, and no one is offering, not even a low-balled offer. So, the upside of a low-balled offer is, that it is an offer, and regardless of how low, it deserves to be analyzed more in depth than the price that is being offered, that is, if you want your property to have a chance at selling. Thanks and best wishes on the sale of your home.

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