Real Estate, Business, Life

5 Things Home Buyers Do That Turn Sellers Off (and Kill Deals)

2011-04-12T09:51:00.000-04:00

5 Things Home Buyers Do That Turn Sellers Off (and Kill Deals)

On today’s market, every savvy seller wants to know what turns buyers off, so they can get their homes sold as quickly as possible, for as much as possible. But buyers, take note – there is a minefield of seller turn-offs you can trigger that hold the potential to keep you from getting the home you want at the best price and terms, or to unnecessarily complicate dealings with your home’s seller.

Lest you think all of today’s sellers are under the gun and will just put up with whatever behavior buyers dish out, be aware that there are still many multiple offer situations in which buyers have to compete with each other to get a home – buyers who trigger these turnoffs tend to lose in those scenarios. Also, avoiding these seller turnoffs can create a transactional environment of cooperation and avoid things turning adversarial. That, in turn, can empower you to score a better price, get extra items you want thrown into the deal, and even negotiate more flexibility around your escrow and move-in timelines – all perks that can make your life easier and your budget go further.

For sellers, these turnoffs pose the potential of irritating you out of an otherwise good deal – maybe even the only deal you have!

Here’s a few of the most common buyer-perpetuated seller turnoffs, with tips for sellers on how to keep an emotional (and economic) even keel, even if your home’s buyer makes some of these waves:

1. Trash-talking. Trash-talkers are the home buyers who think they’re going to negotiate the list price down by slamming the house, telling the sellers how little it is really worth, how the house across the street sold for nothing, why the school on the corner should make them desperate to give the place away, etc. This strategy never works; in fact, when you attack a seller and their home, you only cause them to be defensive, and think up all the reasons that (a) their home is not what you say it is, and (b) they shouldn’t sell their home to you!

Sometimes this happens with buyers who actually love a house and just walk around it fantasizing about all the ways they would customize it to their tastes while a seller is there. Sellers: avoid being at home while your home is being shown. Buyers: save your commentary for your agent; if you do encounter the seller in person keep your conversation respectful and avoid critiquing the house or the list price.

2. Being unqualified for mortgage financing. When a seller signs a buyer’s offer, most often the seller agrees to effectively pull the home off the market, forgoing other buyers who might be interested. As such, the only thing worse than getting no offers on your home is getting an offer, getting into contract, then having the whole thing fall apart when the buyer’s loan falls through – especially if that could have been predicted or avoided up front.

Sellers: Work with your agent to vet your home’s buyers’ qualifications, including their loan approval, down payment and earnest money deposit – before you sign a contract. It’s not overkill for your agent to call the buyers’ mortgage pro before you sign the contract and get a level of comfort for how robust their qualifications are. Buyers: Get pre-approved. Seriously. And make sure that you don’t buy a car, quit your job, deposit lottery winnings or do any other financial twitchery between the time you get loan approval and the time you close escrow on your home.

3. Making unjustified lowball offers. No one likes to feel like they are being taken advantage of. And sellers generally know the ballpark amount that their home is worth, as well as what they need to sell it for to get their mortgage paid off. Yes – the price you pay for a home should be driven by its fair market value, rather than the seller’s financial needs, and deals are more available in a market like the current one, in which supply so vastly outpaces demand. But just throwing uber-lowball offers out at sellers hoping one will hit the spot is not generally a successful strategy, especially if you really, really want a given property.

Sellers: Don’t get overly emotional about receiving a lowball offer; counter at the price you and your agent decide makes sense based on the total circumstances, including your motivation level, recent comps and the interest/activity level your listing is receiving. Buyers: Work through the similar, nearby homes that have recently sold (a/k/a comparables) before you make an offer to factor the home’s fair market value into your offer price – also factor in how much you want the place, too. Don’t be amazed if you make an offer far below asking, and don’t get a response.

4. Renegotiating mid-stream. Sellers plan their finances, moves and - to some extent – their lives around the purchase price a buyer agrees to pay for their home. If you get into contract to buy a home, find out during inspections that costly repairs need to be made, then propose a lower sale price, repair credit or even actual repairs to the seller, that’s sensible and fair. But if you were aware that the property needed a lot of work before you made an offer on it, then you come back asking for beaucoup bucks’ worth of credit or price reductions midstream, expect the seller to cry foul. And holding the seller up two weeks into the transaction because you caught a case of buyer's remorse? Not cool, and not likely to foster the spirit of cooperation you may need to get your deal closed.

Sellers: avoid mid-stream price renegotiations by having a full set of inspection reports and repair bids at hand when you list your home. Buyers: try to avoid renegotiating the entire deal unless you get some major surprises at your inspections or inflating small repairs to try to justify a major price cut.

5. Misleading or setting the seller up. Remember when we talked about buyer turn-offs? Being misled by listing photos or very fluffy property descriptions was high on the list. The same goes for sellers.Offering way over asking with the plan to hammer the seller for a reduction when the house doesn’t appraise at the purchase price? #LAME Making an as-is offer planning the whole time to come back and ask for every penny ante repair called out by the inspectors? Lame squared.

Sellers: If you get multiple offers and are tempted to take a sky-high one or one that claims to be all cash, consider requesting proof that the buyer has sufficient funds to make up the difference between what you think the home will appraise for and the actual sale price, and statements showing the cash truly exists. Buyers: Don’t be lame. I’m not saying you have to tell the seller exactly what your top dollar is, but making offers with terms designed to intentionally mislead is really, really bad form – and can result in losing the home entirely if and when your bluff gets called.

REPOSTED FROM TRULIA

The right way to take advantage of low downpayment loans.

2009-11-03T12:44:00.001-05:00

An FHA loan is a great way for a home buyer to get into a property with a low down payment of only 3.5%. Although the initial fees are high, most of the costs can be covered by the seller at closing. This program allows many first time homebuyers who do not have a large down payment(10%-20%) to get into a home sooner. However, with any low down payment program, there are a few simple things that the homeowner should be aware of and be prepared for to ensure that they don’t run into financial problems later on when they sell since the cost of sale in MA can be anywhere from 5-7% of the sale price.

First, buying a home with a low down payment should be a long term commitment. If you are planning to stay only a few years and then selling, you should not be putting such a low down payment. I recommend buyers who put less than 5% down to stay a minimum of 5 years. This allows you time to build some equity in the home so when you are ready to sell, you are not bringing additional money to the closing table. Building equity in the home also opens you up to additional financing options which can decrease your monthly payments.

Second, when buying a home, you should never assume your property value will appreciate. It is true that real estate values go up over time, but that is calculated over 10-20 years. Based on today’s market, it is safe to assume that short term, real estate values will remain stable or decrease slightly. If you plan on moving in less than 5 years, plan your financials accordingly.

To properly plan your financials, you should pretend like you are saving to put 10% down. Open another savings account and put some extra money away each month such that when it comes time to sell, you have effectively 10% equity. For example, you buy a home today for $400,000 with 5% down. You plan on moving in 5 years. This means that you should set aside approximately $300/month to ensure there is 10% equity at the end of 5 years. The good news is that this forces you to save money and if you end up not needing these funds to sell, you are well on your way to saving for your next home or have extra money for emergencies.

Lastly, remember that low down payment loan programs are a great way to help buyers get into homes sooner and in many cases, owning is better than renting. However, owning a home does come with additional financial responsibilities and being financially prepared will help you make the transition much easier.

If you know anyone thinking of buying a home while interest rates are low and property values are low, please contact me and I will be happy to help.

More Condo Auctions in Natick

2009-11-03T11:56:00.002-05:00

The new construction luxury condos located at 20 South Ave, Natick will be coming up for auction. Thirteen condominium units will be auctioned off on Thursday November 19th at 7:00pm. 11 of the units will be auctioned off with minimum bids of approximately 60% of recent List Price. 2 of the units will be auctioned on absolute basis where the highest bidder wins the unit regardless of how low the bid is!

These luxury 2 bed+ 2 bath+ 1500sqft-2000sqft condominiums are currently about 50% sold out and the developer has decided to auction off the remainder of the units for a quick sale. These units should sell for between $300k-$450k depending on size and unit placement.

If you are interested in taking a look at these, please contact me before the auction so we can go preview the property before auction day.

Also, I believe there will be more luxury condominium auctions coming up in Natick in the next year. Another project located at 93 E Central St(Castle Courtyard) currently has unrealistic expectations of their price and zero units have sold since they started market it over a year ago. I think this condo project will be the next one to go to auction so stay tuned!

Natick Mall Condo Auction Results

2009-10-04T18:18:00.003-04:00

Here are the results for the condo auction. Moving forward, the remainder of the condos will be for sale at auction prices with minor price adjustments according to view and floor.

If you know anyone interested in buying or selling a home, please let me know! I'd be glad to help. Also, if you know anyone who might be interested in purchasing one of these condos in Natick, I can arrange for that as well.

Paul Shao
Keller Williams Realty
508-960-4095

Note: The S stands for Study.

Unit #	Bed/Bath	SQFT	Last Asking	Sale Price	% Discount	$/sqft
902	2/2	1068	$679,900	$335,000	51%	$314
1002	2/2	1068	$699,900	$365,000	48%	$342
626	2/2	1212	$829,900	$394,000	53%	$325
632	2/2	1212	$839,900	$391,000	53%	$323
1006	2/2	1168	$695,900	$367,000	47%	$314
906	2/2	1168	$639,900	$348,000	46%	$298
806	2/2	1168	$644,900	$353,000	45%	$302
948	2/2	1236	$649,900	$411,000	37%	$333
848	2/2	1236	$624,900	$402,000	36%	$325
748	2/2	1236	$599,900	$385,000	36%	$311
943	2/2	1310	$839,900	$413,000	51%	$315
843	2/2	1310	$819,900	$417,000	49%	$318
722	2/2	1330	$614,900	$380,000	38%	$286
622	2/2	1330	$698,900	$388,000	44%	$292
701	2/2	1167	$649,900	$333,000	49%	$285
601	2/2	1167	$634,900	$335,000	47%	$287
926	2/2	1212	$645,900	$346,000	46%	$285
826	2/2	1212	$784,900	$347,000	56%	$286
932	2/2	1212	$659,900	$350,000	47%	$289

1004	1+S/2	1078	$734,900	$327,000	56%	$303
904	1+S/2	1078	$699,900	$315,000	55%	$292
704	1+S/2	1078	$739,900	$364,000	51%	$338
924	1+S/2	1041	$509,900	$312,000	39%	$300
824	1+S/2	1041	$604,900	$310,000	49%	$298
624	1+S/2	1041	$579,900	$308,000	47%	$296
1003	1/1.5	875	$509,900	$266,000	48%	$304
903	1/1.5	875	$489,900	$260,000	47%	$297
603	1/1.5	875	$449,900	$255,000	43%	$291
944	1/1.5	922	$559,900	$290,000	48%	$315
844	1/1.5	922	$534,900	$285,000	47%	$309
744	1/1.5	922	$514,900	$281,000	45%	$305
942	1/1.5	796	$504,900	$249,000	51%	$313
842	1/1.5	796	$479,900	$249,000	48%	$313

1013	3/2	1774	$1,114,900	$510,000	54%	$287
913	3/2	1774	$1,114,900	$501,000	55%	$282
813	3/2	1774	$1,114,900	$489,000	56%	$276
1205	3/3	2110	$1,684,900	$626,000	63%	$297
1105	3/3	2210	$1,584,900	$604,000	62%	$273
1209	3/3	2056	$1,599,900	$570,000	64%	$277

1204	2/2.5	1596	$1,284,900	$470,000	63%	$294

923	2+S/2	1495	$949,900	$399,000	58%	$267
927	2+S/2	1591	$984,900	$447,000	55%	$281
929	2+S/2	1495	$964,900	$395,000	59%	$264

What will the natick mall condos sell for at auction?

2009-10-04T16:49:00.001-04:00

9/17/2009

As you probably heard, 42 units at the Natick Mall(Nouvelle) condos are going to auction. Why are they only auctioning off 42 out of the 200+ units? There are two simple reasons.

1. Mostly importantly, the purpose of the auction is to generate a lot of interest in this condo project. They will use the auction units to bait potential buyers into seeing these condos and hopefully buy a unit in the future at market value.

2. Second, it’s to determine the market value of these condos. They want to figure out what buyers are willing to pay for these units. Once the auction determines the market value, they will price the remainder of the units accordingly based on the results of the auction.

So what will these properties sell for at auction? My analysis is as follows:

1 bedroom 1.5 bath 800-900sqft units will sell for $240k-$260k
1 bedroom + study 2 bath ~1050sqft units will sell for $300k-$330k
2 bedroom 2 bath 1100sqft -1300sqft units will sell for $360k-$400k
2 bedroom + study, 2 bath 1500sqft-1600sqft will sell for $420k-$450k
3 bedroom 2 bath 1800 sqft will sell for $470k-$500k
3 bedroom 3 bath 2100sqft penthouse will sell for $600k-$700k

Are you sure you want to be a Realtor?

2009-09-18T08:47:00.003-04:00

This post was inspired by the fact that too many new real estate agents are coming into the real estate business thinking it's easy and they don't know what they are getting into. We find that they fail miserably 6 months later because they didn't know it would be this difficult. For all those thinking of getting into real estate, please read this first.

Are you thinking of getting into the residential real estate sales business? This article describes what it takes to have a successful career as a real estate salesperson. Do you want to know the truth about being in the real estate business? If so, read on…

First, let’s define a successful real estate agent. A successful real estate agent sells 15+ homes a year and makes over $100,000 in gross commissions. A successful agent is motivated to succeed, wants to make a lot of money, and will do whatever it takes to achieve his goals. This article only applies to individuals who want become a successful real estate salesperson. Do you want to be successful? Those who only want to make $30k-$50k can stop reading.

Who else can stop reading? If you are getting into real estate because you want to make your own hours, work from home, and not follow a specific work schedule, you can stop reading. This business is not for you.

If you are getting into real estate to be your own boss and not have anyone tell you want to do, this business is not for you.

If you are getting into business for yourself because you think it’s easy and you don’t have to work hard. This business is not for you.

If you plan on sitting around and wait for your company to hand you leads, this business is not for you.

So what does it take to be a great real estate agent and run a successful business? What are the best agents in the country doing to succeed? First and foremost, a successful agent sticks to a strict schedule. Here’s an example:

Morning(required)

Arrive at the office between 7am and 7:30am.
Practice and role-play scripts and presentations for 30 minutes to an hour.
Prospect/Lead Generate 2-4 hours each day talking to at least 15-20 people.

Afternoon

Follow-up with leads and clients.
Go on a buyer or seller appointment every day.
Preview homes to learn inventory.
Get contracts signed, negotiate, and close.

A successful agent goes after new business constantly. A successful agent faces rejection day in and day out and still pushes forward looking for that new business. And most importantly, a successful agent does not wait for business, he seeks business. Are you motivated and disciplined enough to go after business?

Lastly, great real estate agents strive daily to improve their skills and expand their knowledge through education. They have somebody to hold them accountable to their business and will hire a coach/mentor to help grow and develop their business and improve their sales skills. If you want to be successful, you must have a coach. Are you willing to take that step?

If you answered “yes” to all of the questions above, you have a strong enough mindset to be successful in this business. Now, is the most important question… what are the startup costs?

Board and MLS Fees: $1,000/year
Office expenses: $100/month = $1,200/year
Signs and Business Cards: $200/year
Coaching and Training: $12,000/year
Personal Reserves: 6 months of living expenses

These reserves and startup costs will help you comfortably adjust to your new career. The less reserve you have, the more pressure you will feel to succeed, which can actually be a great motivating factor to help you achieve your goals.

Now that you have a good overview of what is required to be successful in the real estate business, are you still interested in becoming a real estate agent? If so, let’s get you started.

2008-11-09T17:28:00.001-05:00

Walk around Boston.

The rich getting richer – real estate perspective

2008-04-28T22:32:00.002-04:00

I’m currently reading the book “Why we want you to be rich” by Donald trump and Robert Kiyosaki. They pointed out the fact that the gap between the rich and the poor are getting wider and wider. They also pointed out that many of us are not financially educated. I’d like to talk about these two specific points in relation to what I’m experiencing from the real estate point of view.

The rich are getting richer, and the poor are getting poorer.

And the middle class are getting poorer and starting to disappear! I’m seeing this everyday in the real estate market, especially now when foreclosures are at an all time high and borrowing money is becoming more and more difficult. The “poor” are losing their homes to foreclosure and the middle class cannot afford to buy homes because of the strict lending guidelines. Furthermore, the poor have hurt their credit due to these foreclosures, which will prevent them from building their wealth in the years to come.

All this is making the rich even richer! Right now, only the individuals with cash and great credit can purchase investment property. In addition, they are buying these investment properties at such low prices it’s as if they are stealing directly from the poor! Here’s an example. The poor buys a 3-family home for $500,000 five years ago using a special mortgage. Today, it gets foreclosed on by the bank and goes back on the market for $250,000. The rich then come in and buy the property for $200,000, clean it up, and rent it back to the poor and middle class for huge profit.

I don’t know about you but I definitely want to be doing what the “rich” are doing. Where do you stand?

Financial Education

I’m also noticing that many of us are not as financially educated as we should be. For those of you who are 25 or older, you probably own at least 1 property. If you do, that’s great! But there is one thing that a financially educated person will do with that home that others do not. A financially responsible and educated person would immediately set up a HELOC or Home Equity Line of Credit for their home. This allows you to access a portion of the equity in your home for major purchases such as home improvements or purchasing other properties. This would also be helpful in an emergency if you needed cash quickly.

A HELOC is especially useful to those individuals who have a lot of equity tied up in a property and they can leverage it to purchase more property. For example, a friend of mine wanted to buy a property but would only be able to buy it if they can close in 5 days. She went home, pulled out her check book, and wrote a check out for the full purchase price. To add to my point, I’ve sold many houses to all different types of people. Out of all my clients, the one who bought the most expensive house was the ONLY one who had a HELOC in place. Taking advantage of a HELOC is just one simple example of how the financially educated end up having the most wealth.

Do you have a HELOC set up on your home?

Real Estate Market Update

2007-09-19T11:33:00.001-04:00

Yesterday, the Feds cut interest rates by half a point! This has definitely rallied the stock market but will it help the housing market? One of the purposes of this rate cut is to help stablize the housing market. We are currently experiencing record high foreclosure rates and a lot of this is due people's inability to pay their adjustable rate mortgage. The prime rate is directly related to the adjustable mortgages and half a point reduction in their interest rate may help people with their monthly payments. For some, this might be a few hundred dollars in savings. On the down side, the rate cut will affect your high yield savings accounts such is ING. You will probably see about a quarter point reduction in your interest earnings.

As a Realtor, I'm in the marketplace everyday experiencing and dealing with foreclosures, pre-foreclosures, and bank owned properties. I've been working with several people looking to take advantage of these properties because you are getting a very big discount off market value, in some cases as much as 30%. If you are interested in real estate investing, this is the time to start considering buying a pre-foreclosure or bank owned property. If you have any questions about these type of properties, let me know and I'll be happy to answer them for you!

To help support this site, I would encourage you to spend a few seconds to visit our sponsors to the right. Thanks!

Oh, and my stock picks of the month are RIMM and MOS.

What do you do for work?

2007-09-11T11:53:00.000-04:00

This entry is in response to my friend DY’s blog on jobs. His challenge to his readers was to answer, in depth, what they do for a job. We are commonly asked this difficult question and we respond with a simple and generic answer such as: I’m an engineer/consultant/doctor/scientist/lawyer. But what is it that we really do? What are your day to day tasks and responsibilities? Here is MY response to his question.
People often ask me what I do for work. My answer to them is “I’m in real estate, more specifically, residential sales.” Another words, I’m a Realtor, or Real Estate Consultant. But what does a Realtor really do? What do I do in my day to day life to make money and to build my business? The answer to that is actually very in depth and somewhat complicated.

There is a very common misconception that real estate agents make a lot of money and that their job is very easy. This is a stereotype that is completely wrong. 90% of real estate agents fail in the first 3 years of business and of the ones that do get by; maybe 10% of those actually make a lot of money. The Realtors who you see and interact with are usually the successful ones because they are the ones who do all the business. This is why many people think real estate agents make a lot of money.

So what is it that we actually do as Real Estate consultants? One way of looking at it is like this: Real Estate agents are in the lead generation and customer service business. I am in the business of marketing myself, my services, and my properties. The by-product of my efforts is the sale of a home. During the entire process, I am providing excellent service to my clients and guiding/advising them through the entire process.

My typical day can be broken up into three parts. In the morning, I work on lead generation. I spend around 2-3 hours on this activity. The purpose of lead generation is to find new business, another words, find new buyers and sellers to work with. This activity is the core of my business and it is how I find my clients. It involves emailing, making phone calls, and sending letters/postcards, and reminding people(past clients, friends, acquaintances, etc) to send me business.

The second part of my day is following up with existing clients and making appointments. This takes up another 2-5 hours depending on how many active clients I’m working with and how many deals I have in process. This is where I make sure my current buyers and sellers are up to date on what’s going on. For sellers, I let them know what the status is on their property that I’m marketing. And for buyers I point out properties that might fit their needs and see if want to view them. When there is a property they want to see, I schedule the appointment. This is also the part of the day where I take care of the detailed procedures for existing deals that are in the process of closing.

The final part of my day is to go on appointments. This can take 1-3 hours. For buyer clients, I take them to view homes. This is the small part of the day where the general public sees us working. This is also the easiest and most relaxing part of the day. On the other hand, seller clients are a little different. This is where I go to their home, give them a market analysis of their home, explain to them how I will market their property, convince them that I am the perfect person for the job, and if all goes well, we sign a contract and I list their property for sale. You can think of this as a job interview and it’s also the most stressful and exciting part of the day. If you remember how you felt during the times you’ve been at a job interview - that is what I have to experience that several times a week.

I hope this sheds a little light on my profession. The tasks may sound simple, but the marketing that I do and the words that I say require a lot of thought, creativity, practice, discipline and skills to implement. What do you do for work?

Financial Freedom

2007-09-11T11:28:00.000-04:00

Financial freedom, loosely defined, is a state of financial well-being where your passive income can support your style of living. “Passive income” is defined as the income you receive that’s not from your day to day job. The majority of us has not heard of, or understands the meaning of financial freedom. Some of us know what it is but do not care about it. A few of us thoroughly understand this concept and are trying to achieve it. And only a handful of individuals have achieved this state of financial freedom. Which one are you?

There are many advantages of financial freedom. You don’t have to work, you don’t have to worry about retirement, you can have the freedom to do the things you want to do, you can support your family… just to name a few. The 3 basic stages of financial freedom are:

--Stage 1: your passive income equals your living expenses(housing, food, clothing, car, basic expenses, etc).

--Stage 2: your passive income exceeds your living expenses and you can live very comfortably.

--Stage 3: your passive income greatly exceeds your living expenses beyond stage 2 and you have money left over to do the things that you want(charity, buy toys, etc).

There are many ways to achieve financial freedom but the most realistic way is through real estate. Basically, becoming a landlord. Each investment property that you buy, not only gives you tax benefits, but also generates income or positive cash flow. If a property is bought correctly, you can generate $500-$1000 a month income and sometimes even more. Let’s say for example your cost of living is $4000/month. All you need is 4 properties generating $1000/month to achieve financial freedom.

Of course, this is easier said than done and it can take a lot of time. Let’s say for example a family makes $100k per year. By living a very conservative lifestyle in the beginning, this couple can save $40k per year. Keeping all things constant, they can buy their first investment property in 2 years and start making an extra $1000/month. If they continue living the same conservative lifestyle, they can buy their second investment property 1.5 years later. So on and so forth… and in 6 years time, they can own 4 investment properties generating $4000/month thus achieving the first stage of financial freedom.

I’m trying to reach stage 1 and I’m in the process of looking for and purchasing my first investment property. If you are thinking of buying real estate as well, or know anyone who is, let’s work together and I can help you achieve your goals.
Who do you know that is financially free or on their path to financial freedom? What are they doing to achieve this? Do you want to be financially free? If so, how do you plan on doing that?