5 minute read
Real Estate - Chris Hines
by Focus
focus_contributor.
REAL
ESTATE
with CHRIS HINES
FROM UNREAL ESTATE
People work tirelessly to prepare their property for sale and then the agent markets and generates interest in a home they are trying to sell. Once they get an offer, however, they often are not sure how to evaluate it.
Evaluating the Offer for Your Home: You have read every book under the sun. You have read more internet articles than you can imagine. You’ve spoken to your agent, have cleaned up your home, made repairs and watched the marketing. At this point, you feel like you are an expert in the process. Suddenly, you get an offer on the property. Now what? The first thing to do is relax. Do not make the mistake of rushing to evaluate it. An offer is just that, an offer. It has contingencies and all kinds of little quirks in it. Although you have lived in the home for a lengthy period of time, you need to realise you are now in a business transaction. Once you have caught your breath, it is time to consider the offer. The first issue is always the offered purchase price. In some markets the price will never be what you are asking for in the listing, in the present market it may be full price or even over. It may sometimes be below the number, perhaps shockingly lower. At this point, you may feel the urge to pick up the phone and give the agent/buyer a piece of your mind. Don’t! This is a business transaction. The buyer is merely throwing out a bit of bait to see if you are going to bite. If you do, they get a great deal. If you do not, they will evaluate any counter offer you make. If you do not counter, they can always submit a higher offer. Remember, this is a business transaction, not an affront to your pride! Let me say here though, as an agent, we are always looking to get our seller the best price however we also have an obligation to pass on ‘ALL’ offers to the owner. Likewise I always caution ‘low balling’ buyers that upsetting the seller with a ridiculous offer is not the best way to start a negotiation. I have even seen buyers with ridiculous first up offers being virtually blocked out of future negotiations, to their and sometimes the seller’s detriment. A second issue concerns items in the home the buyer may want included in the sale. I have seen brawls break out over some inclusions/exclusions that would make a biker blush. Maybe that item is an heirloom that you can’t part with, but it probably is not. Only you can decide how valuable it is and whether it is worth losing the sale, but try to be objective and coherent when making the decision. Yes, it has been a loyal lamp, but really now. After this, you need to evaluate any additional costs associated with the offer. The buyer may want allowances for painting and so on. It is usually fairly easy to bypass your emotions on this one, but you need to make some basic financial calculations. Take the offered price and subtract all costs for the transactions. One you have the net revenue figure, compare it to the bottom line number you decided on when you first decided to sell. This will tell you if it is an offer you should accept. One thing I usually advise buyers in a situation where there are obvious rectifications such as painting is to pre-guess the buyers, and have a quote prepared already. It is a great negotiation tool to have ready to counter any extravagant claims. Homeowners often get so focused on the selling process, that they are caught off guard when an offer actually rolls in. Stick to your guns on your bottom line and you should be fine. Above all, remember the reason why you are actually selling. I have seen $800,000 sales fail because of a squabble over $5,000
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