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Fred Yancy's Blog

Luxury Homes, Investment, and Property Management

By Fred Yancy, Broker | Broker in Woodstock, GA

Buyers and Sellers Listen Up

I've been telling you repeatedly that the buyers are hungry and sellers are needed.  Let me share with you what my life was like last night. Yesterday  afternoon I entered a listing into the FLMS systems at 3:00 p.m., within 5 hours I had 10 cash offers all for 1% to 25% over asking price.  Realtors are sending me passionately written letters pleading on behalf of their clients that they just have to purchase this property.

I almost feel like I threw a juicy worm into a frenzied shark tank and the sharks are frantically fighting over this tiny worm. I recently blogged the article, written by Graham Wood, below but it is worth publishing again . . . .

It's becoming a war out there when it comes to buying a home.

An increasing number of would-be homebuyers are finding themselves in fierce competition, as more and more sellers are fielding multiple bidders on their properties. According to recent data from Redfin, some markets saw 73 percent of homes on the market draw in multiple bidders.

"The houses that are in good shape ... are getting several offers," says Tony Geraci, broker and owner of Century 21 Homestar in Highland Heights, Ohio.

So what does it take to claim victory over your competitors if you find yourself in a bidding war? Here are some helpful tips:

1. Keep it simple.

"Don't put a lot of contingencies on your offer," Geraci says. That means, don't make the seller negotiate too much on price or down payment, and don't make a ton of requests on, say, home repairs.

If you require a lot of back-and-forth and have a lot of demands for the seller, he or she is likely to turn to another bidder who's a bit less needy.

When it comes to repairs, "It's time and money for [the seller]," Geraci says. So don't waste a lot of either.

2. Put your best offer on the table.

When you're up against stiff competition, it's not the time to lowball.

"You might not get a second chance," Geraci says, adding that the seller may not counter your offer if it's well below other offers. So put your money where your mouth is.

And if this is your dream home, then be ready to offer more than the asking price. After all, if you see yourself in this house for 10 or 15 years down the line -- or even longer -- then "don't worry about an extra $4,000 or $5,000," Geraci says.

3. Make it personal.

"Tell the seller how much you'd love to raise your family in that person's home," says Tim Dwyer, president and CEO of Entitle Direct, a title insurance company.

Personal, emotional appeals can sometimes tip a seller's decision in your favor. Establish a rapport, and it will likely set you apart from the crowd. It can also give the seller "a very strong sense of the fact that [the buyer wants] to close the deal," Dwyer adds.

4. Come prepared.

Come to the showing with a pre-approval letter from the bank. When a seller can see that a bank already has extended their willingness to finance the deal, it lends credibility to the buyer and edges you closer to getting the home.

5. Offer incentives.

Up your "good-faith deposit," Dwyer says. Buyers generally put down deposits -- typically 1 percent of the purchase price -- on a home to show their intent to buy. Dwyer says that increasing that amount to 3 percent or 5 percent will solidify to the seller that you're ready to close the deal.

You also can offer other things, such as picking up the tab for title insurance, which will leave the seller with more money in his or her pocket.

Fred Yancy, Broker
Crye-Leike Realtors
(678) 799-4663
http://fredyancy.crye-leike.com

Comments

By Trevor Curran,  Thu Apr 4 2013, 05:10
Good morning Fred,

Great article!!! I love the, "Buyers are hungry, Sellers are needed," bit! So, so true! I'm educating my Prequalified Buyers they need to put their best foot forward when negotiating an offer due to the lack of inventory and heat from other Buyers competing against them.

Thanks for sharing!

Trevor Curran
NMLS #40140
By Trevor Curran,  Thu Apr 4 2013, 05:24
Fred, I loved your blog so much, I re-posted and linked to it. Thanks for such a great article!
Trevor Curran
NMLS #40140
By Fred Yancy, Broker,  Thu Apr 4 2013, 05:31
Thanks Trevor - glad you could use it
By Fred Yancy, Broker,  Tue Apr 9 2013, 12:20
An update to this article - in three days, I received 40 offers. Only three were under the asking price. A large percentage were 15% over asking price, and some were between 20% to 25% over asking price. Buyers - that should tell you a lot! Gone are the days when you can bid at or below asking price. Good luck buyers, until we get more people selling their homes, the competition will remain stiff!
By Mark Acantilado,  Wed Apr 17 2013, 03:34
I can say that this is close to reality .. Home inventory is very low in several local markets while the demand is very high and so it signals a stiff competition among sellers to provide what home buyers are looking for. The home buyers, should of course, beware themselves that this kind of situation can be used by rogue realtor agents in making negotiations and transaction that are not legal. Home buyers should make sure that they are dealing with the right seller legally.

Thanks
Mark Acantilado | AgentCampus.com
http://www.agentcampus.com/
By Fred Yancy, Broker,  Wed Apr 17 2013, 03:45
12 Questions to Ask When Choosing a Real Estate Agent

Make sure you choose a real estate agent who will provide top-notch service and meet your unique needs.

How long have you been in residential real estate sales? Is it your full-time job? While experience is no guarantee of skill, real estate — like many other professions — is mostly learned on the job.

What designations do you hold? Designations such as GRI and CRS — which require that agents take additional, specialized real estate training — are held by only about one-quarter of real estate practitioners.

How many homes did you and your real estate brokerage sell last year? By asking this question, you’ll get a good idea of how much experience the practitioner has.

How many days did it take you to sell the average home? How did that compare to the overall market? The realtor you interview should have these facts on hand, and be able to present market statistics from the local MLS to provide a comparison.

How close to the initial asking prices of the homes you sold were the final sale prices? This is one indication of how skilled the realtor is at pricing homes and marketing to suitable buyers. Of course, other factors also may be at play, including an exceptionally hot or cool real estate market.

What types of specific marketing systems and approaches will you use to sell my home? You don’t want someone who’s going to put a For Sale sign in the yard and hope for the best. Look for someone who has aggressive and innovative approaches, and knows how to market your property competitively on the Internet. Buyers today want information fast, so it’s important that your realtor is responsive.

Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction? While it’s usually legal to represent both parties in a transaction, it’s important to understand where the practitioner’s obligations lie. Your realtor should explain his or her agency relationship to you and describe the rights of each party.

Can you recommend service providers who can help me obtain a mortgage, make home repairs, and help with other things I need done? Because realtors are immersed in the industry, they’re wonderful resources as you seek lenders, home improvement companies, and other home service providers. Practitioners should generally recommend more than one provider and let you know if they have any special relationship with or receive compensation from any of the providers.

What type of support and supervision does your brokerage office provide to you? Having resources such as in-house support staff, access to a real estate attorney, and assistance with technology can help an agent sell your home.

What's your business philosophy? While there's no right answer to this question, the response will help you assess what’s important to the agent and determine how closely the agent’s goals and business emphasis mesh with your own.

How will you keep me informed about the progress of my transaction? How frequently? Again, this is not a question with a correct answer, but it reflects your desires. Do you want updates twice a week or do you not want to be bothered unless there’s a hot prospect? Do you prefer phone, e-mail, or a personal visit?

Could you please give me the names and phone numbers of your three most recent clients? Ask recent clients if they would work with this realtor again. Find out whether they were pleased with the communication style, follow-up, and work ethic of the real estate agent.

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