Seller Resources - Articles

Selling Your Home - Negotiations.

Is there a secret to good negotiating?
Most people do not enjoy negotiating.  It can be stressful, especially on something as important as your home.  That is where I come in.  I will find out as much as I can about the other party.  I will not reveal any information to them that undermines your negotiation.   I will not pressure you, but rather give you the information you need to make a decision.

What conditions are normal in an offer to purchase?
Most offers include two standard conditions: a financing condition, which makes the sale dependent on the buyers' ability to obtain a mortgage commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction.  If either of these conditions cannot be met the buyer does not have to continue with the sale.  The buyer would not  forfeit his or her deposit under these circumstances.   Once all of the conditions are removed, you have what is called a firm sale and the buyer's deposit is on the line should they not complete the sale.

How is the price set?
It's very important to price your home according to current market conditions. Because the real estate market is continually changing, and market fluctuations have an effect on property values, it's imperative to select your list price based on the most recent comparable sales in your neighborhood. A so-called comparative market analysis provides the background data upon which to base your list-price decision. When you prepare to sell and are interviewing agents, study each agent's comparable sales report (the data should be no more than three months old). If all agents agree on a price range for your home, go with the consensus. Watch out for an agent whose opinion of value is considerably higher than the others.

What if I get a low-ball offer?     
A low-ball offer is a term used to describe an offer on a house that is substantially less than the asking price. While any offer can be presented, a low-ball offer can sour a prospective sale and discourage the seller from negotiating at all. Unless the house is very overpriced, the offer will probably be rejected. You should always do your homework about comparable prices in the neighborhood before making an y offer. It also pays to know something about the seller's motivation. A lower price with a speedy escrow, for example, may motivate a seller who must move, has another house under contract or must sell quickly for other reasons.

Do I have to consider contingencies?
If you are a seller in a seller's market, in which there is more demand than supply, you probably won't have to entertain too many contingencies. But if you are selling in a buyer's market, when buyers are few, prepare to be very flexible. Granting contingencies also depends upon what kind of price you want to get and on the condition of your property, most experts agree. Remember, contingencies are written into the contract and are negotiable during the negotiation phase only.

What is the difference between market value and appraised value?
The appraised value of a house is a certified appraiser's opinion of the worth of a home at a given point in time. Lenders require appraisals as part of the loan application process; fees range from $200 to $300. Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Either an appraisal or a comparative market analysis is the most accurate way to determine what your home is worth.

Is a low offer a good idea?
While your low offer in a normal market might be rejected immediately, in a buyer's market a motivated seller will either accept or make a counteroffer. Full-price offers or above are more likely to be accepted by the seller. But there are other considerations involved:
* Is the offer contingent upon anything, such as the sale of the buyer's current house? If so, a low offer, even at full price, may not be as attractive as an offer without that condition.
* Is the offer made on the house as is, or does the buyer want the seller to make some repairs or lower the price instead?
* Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.

What is the best time to sell your house?
There is no best time to sell.  If you can sell when there are not as many homes on the market, generally your home will sell faster.  It depends on supply, demand and economic factors you have no control over.  The time of year in which you choose to sell can make a difference both in the amount of time it takes to sell your home and in the ultimate selling price.  Weather conditions can affect the market.  Too nasty and too nice.  Sometimes people just do not want to go out in bad weather too look, or else the seize the good weather when they can.  I have sold homes on December 23, during Stampede week, and on long weekends.  Time of year is not as important as the economic climate.  But really homes sell all of the time.  If it is the right time for you to sell,  we can adjust to the market.  We do not believe you should take your home off of the market for the holidays.  Chance are you will not have many showings but the ones you do will be serious.  

Douglas McKay
Douglas McKay