Why You Should Never Make A Lowball Offer On A House
b'With Terry Story, 28-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
Lowball Offer on House
Today\'s talk with Boca Raton real estate agent Terry Story begins with a question from Steve about the wisdom of making a lowball offer on a home you\'re interested in buying.\\xa0 Terry states unequivocally that lowball offers are a bad idea all the way around, particularly in today\'s seller\'s market when a majority of listed properties receive multiple bids.\\xa0 Not only are these offers almost always rejected when sellers have the upper hand, as they do now, but offended sellers generally won\'t bother to make a counter offer.\\xa0 If the rejected buyer wants to submit a new, higher bid, his negotiating power is far less than it would have been without the lowball bid.
Comps Based on Interior, Locale, Upgrades, Photos
For home buyers trying to get a handle of what a fair price is for a property they\'re interested in, it\'s critical to look at neighborhood level comps (comparisons) that have recently sold within a 20% price range of the asking price. But this is just a beginning and relatively superficial.\\xa0 A professional assessment would factor in the interior condition of the home, the qualities of its locale, and the need for updates or maintenance fixes.\\xa0 One way to gain insight into the latter issue is by reading the realtor notes that accompany a listing.\\xa0 While realtors trying to sell a home are naturally going to emphasize the best aspects of the home, what they leave out can be more telling.\\xa0 A lack of details on items that require periodic updates \\u2013 like roofs or hurricane windows here in Florida \\u2013 can indicate problems that ought to impact the sale price.\\xa0 As far as locale, a deeper look at the specifics of the property \\u2013 does it back onto a lake or a busy road, for example \\u2013 is important as well.\\xa0 It shouldn\'t be a surprise that the shape that the interior of the house is in should also be a major consideration.\\xa0 While you may have heard it before, it bears repeating that photos of the home can be deceptive and should not be a substitute for a tour of the property.\\xa0 It\'s fairly easy for a professional photographer to make a home look bigger, prettier, and more pristine than it really is.\\xa0 Buyer beware!
Mortgage Pre-Approval
Steve shifts the conversation to mortgage pre-approvals, asking whether they play a big role in the sales process.\\xa0 Terry\'s answer is an emphatic yes: pre-approvals are critical, especially in today\'s market.\\xa0 For starters, a pre-approval will give you a concrete idea of what you can afford.\\xa0 Secondly, sellers now require pre-approval. Finally, in a competitive market like we have today, the buyer who has all her paperwork in order is going to have a much better shot at winning a bidding war.\\xa0 The transparency of a buyer\'s financial position, that a loan pre-approval demands, is reassuring to sellers.
Home Updates and Maintenance Items
The presence or lack thereof of key home updates and maintenance items can affect a home\'s sale price and buyer-seller negotiations.\\xa0 While bigger updates to kitchens, baths, and floors are more easily factored in, maintenance issues (air conditioners, hot water heaters, etc.) often only come to light after a property inspection, after a price has already been agreed upon.\\xa0 Sellers should ideally show some flexibility and willingness to either lower their price or have work done and old items replaced, but they frequently elect to hold the line, reiterating that the property is offered \\u201cas is" or offering only very minor concessions on the price. It\'s not uncommon for this stance to provoke buyers to rescind their offers and walk away. If a seller hasn\'t carefully considered the costs of needed maintenance work and/or replacement of aging items on the asking price of the home and...'