We’ll attempt to answer a few questions we hear things buyers say:
1. What did the seller pay for the home? What the sellers paid back in time really has no bearing on its value today. If a seller paid $300,000 5 years ago and it’s only worth $200,000 today you’re not going to offer $300,000 because that’s what the seller paid. Conversely if the seller paid $62,000 back in 1975 and it’s worth $300,000 today their not going to sell it for $90,000. Sellers should expect to sell at today’s current value and buyers should expect to pay that as well. What a seller paid or how much they owe has nothing to do with value.
2. If it’s meant to be it will happen- When a buyer says these words it’s typically out of fear of making a decision, so they sit back and let someone else make the decision for them. Let’s say more than one buyer is interested in a home. Buyer A doesn’t know what to counter offer in light of the news another buyer is interested, so they freeze. They essentially let another buyer make the decision for them. I’ve found in life that when you let others make decisions for you, you might not like the outcome. You are in control of your own destiny. If it’s a home that suits your needs and you really like it you have a chance to control your fate. Step up or you may be forced to offer on your 3rd or 4th best favorite. In this market there is limited inventory, so finding 4 homes you really like might be tough.
3. Is the Seller motivated? If I am the listing agent I simply answer the buyer agent with yes, they are interested in selling or they wouldn’t have put it on the market. It’s in the buyers interest to find out what they can if a seller or seller’s agent will tell, but it’s not in the sellers best interest to do so. You can always ask the question, but don’t be offended if you don’t receive an answer. The buyer doesn’t get to know the seller’s private business just as the seller doesn’t need to know the buyer’s private business, other than if the buyer is qualified at the agreed upon price.
4. I heard you always offer 10% less on a home. We’ve had buyers say this is a rule where they came from. First off, there is no rule. Secondly, all real estate is local and certain areas may have customs, but I highly doubt asking 10% less in any market is a good idea unless sellers typically overprice homes in a certain area. Most homes in SW Florida sell for about 96-97% of asking price, so if you’re offering 10% less you’re probably losing out to other buyers who are more realistic. If a home is overpriced by 10% or more that’s another story, but those homes typically aren’t getting offers because they are so over-priced.
5. Will the seller do a lease-option? Most sellers wish to sell outright. Occasionally a seller wouldn’t mind leasing first, but they hate to lock in a price today at today’s prices in a rising market. Buyers typically have misconceptions about how the lender will finance the home at the end of the option. Rent money cannot be used for down payment money unless buyer pays over fair market rent as determined by the appraiser and then only that portion above fair market can be credited as down payment. Also, the buyer loses the option money if they don’t close for any reason. Many buyers ask this question because they don’t have good credit today and they may not have 1st month, last month’s rent and security deposit. Both buyer and seller should sit down with an agent and discuss their options first or a situation like this could turn out badly for both later.