If
you are a seller in a seller's market in
which there is more demand than supply,
you probably won't have to entertain too
many contingencies. But if you are selling
in a buyer's market, when buyers are few,
prepare to be very flexible. Granting contingencies
also depends upon what kind of price you
want to get and on the condition of your
property, most experts agree. Remember,
contingencies are written into the contract
and are negotiable during the negotiation
phase only.
Q:
Is
a low offer a good idea?
A:
While your low offer in a normal market
might be rejected immediately, in a buyer's
market a motivated seller will either accept
or make a counteroffer.
Full-price
offers or above are more likely to be
accepted by the seller. But there are
other considerations involved:
* Is the offer contingent upon anything,
such as the sale of the buyer's current
house? If so, a low offer, even at full
price, may not be as attractive as an
offer without that condition.
* Is the offer made on the house as is,
or does the buyer want the seller to make
some repairs or lower the price instead?
* Is the offer all cash, meaning the buyer
has waived the financing contingency?
If so, then an offer at less than the
asking price may be more attractive to
the seller than a full-price offer with
a financing contingency.
Q:
What
contingencies should be put in an offer?
A:
Most offers include two standard contingencies:
a financing contingency, which makes the
sale dependent on the buyers' ability to
obtain a loan commitment from a lender,
and an inspection contingency, which allows
buyers to have professionals inspect the
property to their satisfaction.
A
buyer could forfeit his or her deposit
under certain circumstances, such as backing
out of the deal for a reason not stipulated
in the contract.
The
purchase contract must include the seller's
responsibilities, such things as passing
clear title, maintaining the property
in its present condition until closing
and making any agreed-upon repairs to
the property.
Q:
How
is the price set?
A:
It's very important to price your home appropriately
according to current market conditions.
Because the real estate market is continually
changing, and market fluctuations have an
effect on property values, it's imperative
to select your list price based on the most
recent comparable sales in your neighborhood.
A
comparative market analysis provides the
background data upon which to base your
list-price decision. Study the comparable
sales material presented to you by the
different agents you interviewed initially.
When you prepare to sell and are interviewing
agents, study each agent's comparable
sales report (the data should be no more
than three months old).
If
all agents agree on a price range for
your home, go with the consensus. Watch
out for an agent whose opinion of value
is considerably higher than the others.
Q:
Are
low-ball offers advisable?
A:
A low-ball offer is a term used to describe
an offer on a house that is substantially
less than the asking price.
While
any offer can be presented, a low-ball
offer can sour a prospective sale and
discourage the seller from negotiating
at all. Unless the house is very overpriced,
the offer will probably be rejected.
You
should always do your homework about comparable
prices in the neighborhood before making
any offer. It also pays to know something
about the seller's motivation. A lower
price with a speedy escrow, for example,
may motivate a seller who must move, has
another house under contract or must sell
quickly for other reasons.
Q:
Is
there a secret to good negotiating?
A:
There
are several cardinal rules to negotiating
effectively. One is do your homework, and
learn as much about the seller or the buyer
as you can. Another is to play your cards
close to your vest and not reveal too much
information to the other party or their
agent. Don't let yourself get rushed into
any decision, no matter how tempting it
may be. Finally, if you have doubts about
your negotiating skill, hire someone to
help.
Q:
What
is the best time to sell your house?
A:
There
is no "best" time to sell per
se. Selling a house depends on supply,
demand and other economic factors. But
the time of year in which you choose to
sell can make a difference both in the
amount of time it takes to sell your home
and in the ultimate selling price.
Weather
conditions are less of a consideration
in more temperate climates, but most of
the time, the real estate market picks
up as early as February, with the strongest
selling season usually lasting through
May and June.
With the onset of summer, the market slows.
July is often the slowest month for real
estate sales due to a strong spring market
putting possible upward pressure on interest
rates. Also, many prospective home buyers
and their agents take vacations during
mid-summer.
Following the summer slowdown, real estate
sales activity tends to pick up for a
second, although less vigorous, fall market,
which usually lasts into November when
the market slows again as buyers and sellers
turn their attention to the holidays.
If this makes you wonder if you should
take your home off the market for the
holidays, consider the advice of veteran
agents: You are always more likely to
sell your house if it is available to
show to prospective buyers continuously.
Q:
What
is the difference between market value and
appraised value?
A:
The appraised value of a house is a certified
appraiser's opinion of the worth of a
home at a given point in time. Lenders
require appraisals as part of the loan
application process; fees range from $200
to $300.
Market value is what price the house will
bring at a given point in time. A comparative
market analysis is an informal estimate
of market value, based on sales of comparable
properties, performed by a real estate
agent or broker. Either an appraisal or
a comparative market analysis is the most
accurate way to determine what your home
is worth.
