Written by Loreena Yeo
Copyright 2008
Most parts of the country, including my Frisco TX real estate market is undergoing a Buyer's market - generally speaking. (Some spots - whether it is the price range or location of the market are not suffering at all) By that I mean that Buyers have many houses to select from and being a Seller at this point in time is definitely not fun. You are right, it down-right awful. However, despite the current real estate market conditions, if you are a purchaser in this marketplace, there are some facts you ought to know.
Even you have the upper hand in this Buyer's market, do understand that your offers have to be somewhat "reasonable". For example, If the Listing Price is $350,000 and the comparables support a $342,000 number, your verbal offer of $220,000 most likely would not buy you that house. In all seriousness, the contract that you and your realtor put together could perhaps be just a waste of time. (Again, perhaps).
Not only your number should be somewhat "justifi-able", it should also be endorsed with a written formal offer. Then, your experienced real estate agent could perhaps include a copy of your pre-approval or bank approval letter, copies of your earnest money and option fee checks (account numbers blacked out). Again, market comparables are only used to indicate what the "typical" or "average" house would sell for in the neighborhood you picked. However, we know that ultimately, it is a Buyer and Seller for that specific home that determines the final price.
What Does This Mean If You Were a Buyer In A Real Estate Transaction?
You can make any and all the offers you want. It is ultimately yours and the Seller's decision to determine the final price. No doubt that this is a time where you can take an advantage, the odds are great for you. However, Sellers still do need see if they could accept the price you offer. Again, a verbal offer in a real estate transaction bears no weight and credibility. I understand that you are very conscious about the price, however, all terms come into play besides just the price. In short, there is just more than price that determines the transaction is successful. Your experienced realtor will be able to assist and navigate this path with you.
What Does This Mean If You Were a Seller In A Real Estate Transaction?
First of all, please do not get upset or offended by the Buyer who has just given you a "low" offer. Again, the word "low" here is relative. Many times, Buyers consider many factors before placing that number on the contract. Most of the time, it is simply because he/she is taking the chance that this real estate market has NOT bottom out yet. However, the positive side to this is that you at least have an offer to chew on. Some buyers are just down right trying their luck. Most of them who care enough to give you a formal written offer ultimately are interested in purchasing the house. If you do have a contract, you at least have something to negotiate rather than being on the other side of the extreme, that your house will probably sit on the market for much longer. Give it a good work out (negotiation rounds). See if there is a number that truly would make you and your Buyers feel at ease.
What Does This Mean If You Were an agent?
You must get your buyers to show some good faith that there is some seriousness in the offer. However, all I can say is that do not take the written offer "personally". It may or may not be a reflection of you. (Some are jokes!). Ultimately, we are hired to work in our clients' interests. After seriously discussing the effects of an offer (reasonable or unreasonable), just let it be and see how the situation pans out.
