It is in the past that we find the quaint efficient way to handle the negotiations of the real estate contract.
The simple concept of ‚in good faith‘ has (over time) been strengthened by the holding of earnest money. Earnest Money and Faith are held hand in hand. Hence, the seller and the buyer have typically agreed to earnestly act in good faith in order to make a real estate deal happen.
The Realtors and the real estate attorneys involved in the transaction take on the roles of coach and referee, while the mortgage lender provides the ball. Pulling a fake out will be grounds for a penalty, so remember to act earnestly (and always) proceed in good faith.
The subject at hand, has to do with today’s real estate market.
The market has had a huge shift in prices, and reasonable sellers have lowered their expectations along with their prices. It took some time, but the adjustment seems to have taken place across many real estate markets.
Unfortunately, the adjustment has not made it over to the buyers side.
Rumors and misinformation have filled the minds of reasonable buyers and turned them into vultures looking for road kill. There is a supposition that all sellers are in foreclosure and desperate to sell their homes. The news media reiterates this information daily.
And, here, below, is a look at how this type of transaction works in real life:
The sellers get the offer, it’s 30% below list price.
NOTE: The sellers have already priced their home 30% below market value (what they would have received a year ago. Their home is adjusted for what is now current fair market value.
The sellers counter offer looks something like this:
„We will reject your offer. See, we are not desperate. We just want a reasonable offer, not a low ball offer 30% off our asking price. Okay, to be fair, we will counter the offer.
Absolutely, counter it at full price, not a penny less.“
The buyer then cops an attitude:
„There are plenty of homes on the market and I will just keep looking until I find someone who wants to actually sell their home.“
As the Realtor, let me interject:
„The sellers have made their home sparkling clean, model perfect; they have packed up most of their daily possessions; they have brought the home to new current market values…they have had the home pre-inpsected and are offering a home warranty with it as well. It should handily appraise. The sellers aren’t in foreclosure, what information are you basing your offer on other than you were told all sellers are desperate and they will accept any price? „
„This is a buyers market and if the seller is going to be unreasonable, I will just keep looking.“
A thought about this. The sellers may be facing a difficult selling market, but unless you are a cash buyer, the seller has to take it your offer on good faith; that you will earnestly march forth and provide the lender with all the documents that they may need to get you (the buyer) through to the closing table.
What if sellers took the stance that all buyers (except cash buyers, got to love’em) were unqualified because of new strict lending policies or looming layoffs. Yes, you may qualify now, but rumors that the ax is falling on more jobs means that you may never close.The negotiation of real estate purchases is still a two way street.
People typically buy houses to make them into a home. If you are an investor, stick with the foreclosures. If you are honestly looking for a house for you and your family to call a home, then proceed in such a manner.
Again, from the sellers:
„When you get serious about offering a negotiable price, we can move forward. We are not overly proud nor are we desperate. If you don’t want the house at a fair price, and don’t want to act in good faith, maybe this house isn’t for you. We are looking for someone to work with. Someone who will love our home, the moment they enter it. Not someone looking for roadkill. In the mean time, we are going to seek other buyers.“
This conversation, sprinkled with a little attitude and you have a perfect recipe for a terrible sandwich. One that will leave a bad taste for real estate in everyones‘ mouth.
A Home Quiz for you:
Have you heard any of these sayings before?
Home is where the heart is.
Home is where my honey is.
Home, sweet home.
Ahh, I thought so.
Real estate is a good sound investment. The home buying and selling transaction is like none other. It is tied to heart strings…emotions. If you find a home you love, proceed forward with your negotiations, and be realistic. Eventually, the shoe will be on the other foot, and someday you will be the home seller. You will find yourself hoping that someone will come along and buy your home, and that they too, will love it like you do.
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Source by Claude Cross