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Negotiating |
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| Q:
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Is a
low offer a good idea? |
| A:
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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.
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| Q:
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What
is the difference between market value and appraised value?
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| A:
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Appraised value 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. |
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| Q:
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What
contingencies should be put in an offer? |
| A:
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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.
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| Q:
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How is
the price set? |
| A:
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It's very important to
price your home appropriately relative 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 on
which to base your list-price decision. Study the comparable sales
material presented to you by the different agents you interviewed
initially. If the analyses are more than two or three months old,
have your agent update the report for you.
If all agents agreed 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. |
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| Q:
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What
is the best time to sell your house? |
| A:
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In addition to supply and demand, and
other economic factors, the time of year 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.
Sellers often wonder whether or not they should take their homes
off the market for the holidays. Generally speaking, you'll have the
best results if your house is available to show to prospective
buyers continuously until it sells.
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| Q:
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Are
low-ball offers advisable? |
| A:
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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 an y 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.
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| Q:
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Do I
have to consider contingencies? |
| A:
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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.
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