Many parts of the country remain seller’s markets. With not enough inventory and too many buyers, many houses are actually selling for too much.
This happens when the contract price exceeds the appraisal value of the property. The buyer must then come up with the difference, or the seller must reduce the sales price.
Many buyers are beefing up contracts without going over the appraised value of a property. This keeps them from having to renegotiate or lose the contract entirely.
Their strategies include using monetary and non-monetary offers. With one recently winning contract in a hot market, it wasn’t the sales price and bottom line to the seller that enticed the seller — it was the offer to allow the seller to remain in the condo for a week after settlement. Quite clever as this is a time-honored strategy used in buyer’s markets the other way around. Most times, sellers offer unusual attachment to the contracts, but now the tables have turned.
Another addendum frequently used is to offer a bonus to the seller instead of a higher sales price. You have to check with your lender to make sure that this is allowed. This works quite simply. If you know the house will only appraise for $225,000, it’s a waste of time to offer $235,000. But you might have an extra $10,000 in savings. You can offer this to the seller as a bonus, rather than making it part of the sales price.
Take the time to meet the seller on a deeper level. The relationship angle can win in a contract war. Many home sellers don’t care that they recevie $2,000 more from one buyer over another. If they truly loved their home, it could be that they are looking for a good feeling about who is buying the house. A great selling point is to market yourself to the seller.
For example, one family wrote a letter to the seller explaining how the home would be perfect for their handicapped little girl. They stressed that it would meet their family’s needs so well that they hoped their offer would be accepted.
The sellers verified the story and were so touched that the family won the contract.
Letters to the seller are nice, but keep them brief and to the point. Simply explain how the house fulfills your dreams or needs and what you love about the house. Compliment the seller on the upgrades, colors, additions, etc, that they have done. Don’t just kiss up, tell them why you care about the home.
When it comes to writing the contract, have your agent call the listing agent and find out what the sellers are looking for. Many agents should already know to do this, but many need a little nudge. If you can find out why the sellers are moving, where the are moving, if they are retiring or if they need money, you could have an edge in winning the contract.
There is a real difference between someone who just plops down a lot of money and someone who takes an interest in you. The bottom line isn’t always the bottom line. Find out what the seller wants and give it to them.
Martin Lukac, represents http://www.RateEmpire.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies! Visit http://www.RateEmpire.com today.
[tags]seller market,real estate economy,real estate trends,real estate,buying homes[/tags]
Tags: buying homes, real estate, real estate economy, real estate trends, seller market