Aug. 8, 2017

Ideas For Winning In Multiple Offer Situations

 

Multiple offers on homes are here to stay, at least until we see housing inventory rise.  Here are a dozen tips for how you can win in a multiple-offer situation from our friend Brent Shoemaker at Shoemaker Inspections. It's isn't always about price! Read on.

It seems that just when you think you have the real estate market figured out, it changes. Not so long ago many real estate agents were juggling short sales, but today in many areas they are now grappling with multiple offer situations.

Multiple offers are here to stay as inventory levels continue to decline due to the lack of new construction and the disappearance of short sales and foreclosures. Buyers and investors are coming out in droves buying up everything with a For Sale sign.

Winning at a multiple offer presentation begins with putting your very best foot forward. There are many ways to make an offer look attractive and not all sellers care only about the price; many of them care about time and convenience. A strong agent tries to find all the possible pain points for the seller and then crafts an offer with their buyers that address those points.

The first step to putting together a winning offer is to know your choices for making the offer as strong as possible. Buyers need to be fully aware of the importance of being competitive and strong on paper when trying to buy a home that will have offers coming in at the same time. Sometimes it is the littlest things that will make the difference to the seller. Most agents naturally think of things like greater earnest money or cash versus financing, but a seller might be swayed by another small detail. Perhaps a shorter closing date or even a longer closing date would be more attractive to the seller.  Some buyers are even including a flexible closing date clause that allows the seller to choose the closing date they want from a list of possible date range (for example: any date between April 15th and May 31st). This gives the seller the ability to customize the closing date to their liking without having to counter to the one specific date that might be on the offer. Remember, any counter changes the offer and therefore can be an out for the buyer and may be a risk the seller may not want to take.

 

There are other things that buyer are doing now to get their offers noticed in a multiple offer presentation:

ESCALATION CLAUSES
Buyers need to understand the importance of them addressing the potential competing offers' price points. Escalation clauses and acceleration clauses are common practice in a multiple offer situation and need to be used correctly.

DOWN PAYMENT
Many sellers find a larger down payment attractive because they feel this shows stronger intent from the buyers and less likelihood that the buyer will walk away from the transaction.

FINANCING VERSUS CASH
In most cases, sellers prefer cash offers over financed ones because this eliminates the seller's' need for an appraisal, the opportunity that something could go wrong with either that or the loan process. But I have seen many sellers in my time accept offers that require financing because the offer was higher in price.

INSPECTION VERSUS PRE-INSPECTION
Many buyers are doing pre-inspections so they can go in with clean offers. This is also attractive to sellers because it eliminates the worry of the seller thinking the inspection might uncover something that could be problematic and potentially damaging to the sale.

TITLE REVIEW
Many buyers are waiving title review contingencies so they can eliminate the possibility that the seller won't accept their offer because there is still something that needs to be approved prior to the property selling.

BUYER LETTERS
Many agents are presenting handwritten letters from their buyers to the seller trying to give their buyer an emotional edge. But you have to be VERY VERY careful with this because of the Fair Housing laws.

APPRAISAL ISSUES
If the buyer is using the financing to purchase the property and depending on how much available cash they have for this property it is important to address the burning question the seller might have about the buyer's' ability to purchase the property even in the event the appraisal comes in short. Many agents are including clauses that are very specific about the amount the buyer is willing to accept if the appraisal is low and then they are disclosing how they will address this.

BUYER TO CLEAN HOUSE
Savvy agents are urging their buyers to put in a clause that says that the buyer will have the home cleaned so the seller does not need to clean the home. Some sellers have found this very appealing because the last thing they want to do when moving is clean the house they are leaving.

BUYER TO REMOVE GARBAGE FROM HOUSE
When competing in a multiple offer situation you have to assess the possible pain points of the sellers. Whenever a seller moves there is bound to be a lot of garbage that will need to be removed from the home prior to the buyer taking possession of the home. Allowing the sellers to leave their garbage in the garage and the buyer will remove is very appealing to the sellers.

BUYER TO ALLOW RENT BACK
Giving the seller the option to do a short term rent back is often the determining factor for a seller. Never underestimate the power of convenience in your multiple offer negotiations.

MOVING CREDIT
Including a moving credit for the sellers to cover their moving expenses is just another thing you have in your toolbox to offer sellers to sweeten your client's' offer.

DELAYED POSSESSION
Sellers often want to sell but get overwhelmed when the timing of the closing is discussed. Giving the sellers the option to have the buyer take possession of the property at a time that is more suitable to the seller or that has been delayed to benefit the seller is another type of potential perk the seller might find attractive.

These are just a few strategies that buyers are using to win the home of their dreams.  Not all of the tactics will work with all financing options.  Make sure your real estate agent understands your goals and your situation thoroughly and understands what your competition may be doing to prevent your from getting your offer accepted. 

 

Dec. 1, 2016

What Is A Realtor?

What is a Realtorâ?

A Realtorâ is a real estate agent who is a member of the National Association of Realtors.  Realtorsâ subscribe to a strict Code of Ethics and pledge to protect the interests of their clients by providing fair treatment for all parties involved in a real estate transaction.

Why do I need a Realtorâ?

As a consumer, how often do you buy real estate property?  Once, twice, five times in your life.  Purchasing real estate is a complex and major transaction with many details to be handled.  In the majority of the cases, the seller will be represented by a Realtorâ.  Wouldn’t you want to have complete and fair representation in your real estate transaction?

What exactly does a Realtorâ do for me?

Your agent should do many things for you including giving you a list of homes to look at, help you find good quality financing options, show you homes that meet your criteria, negotiate on your behalf to get you the best deal, take all necessary steps to get you to closing and give you the advice that you ask for.

ABOUT THE OWNER AND BROKER OF HOME RUN REAL ESTATE:

Lloyd Reed has been a licensed Real Estate Agent in the Grand Rapids and West Michigan areas for 15+ years and loves to sell real estate. He is the broker and owner of Home Run Real Estate and one of the primary brokers for both the Inner City Christian Federation. Lloyd, along with his team of top real estate consultants specializes in helping first time home buyers, HUD home buyers, motivated home sellers and real estate investors accomplish their real estate goals. His team consistently ranks in the top 5% of all real estate agents nationwide in both real estate sales and real estate transactions. For more information on Lloyd Reed and Home Run Real Estate’s All Star Services you can visit www.HomeRun-GR.com or call 616-889-7662. Home Run Real Estate is located at 5500 Northland Dr. NE Suite A, Grand Rapids, Mi 49525.

 

 

Nov. 22, 2016

Home Buying Process

Are you considering buying a home but just don't know where to start?  When interviewing home buyers we consistently hear from them that they would have started the home buying process earlier but they just weren't comfortable because they did not know or understand the process.  Below is a step by step process that outlines the home buying process.  Of course every home, home purchase and home buyer is different so the process can change a bit.  However, if you are getting a mortgage for a home purchase this checklist will at least give you some direction.  We hope this helps and we would love to hear your feedback.

THE HOMEBUYING PROCESS 

  1. Get approved for a home loan with a reputable lender.

  2. Interview Realtors and choose the Realtor you are most comfortable with.
  3. Receive listings via mail, email, or in person.

  4. Drive by each listing, pick out 3-5 homes to view and call your Realtor with addresses and MLS numbers.

  5. View properties with your Realtor and pick out one that you want to purchase.

  6. Write an offer.

  7. Negotiate the offer until both the buyers and the sellers are satisfied.

  8. Offer accepted and the purchase process begins.

  9. Your Realtor should email all pertinent paperwork to your loan officer, order home inspections, order the termite inspection and collect your good faith deposit.

  10. Attend home inspections.

  11. Negotiate any needed repair work discovered during home inspections.

  12. Repair work addendum accepted and the purchase continues.

  13. Your Realtor should request that your lender order the appraisal.

  14. Appraisal is completed and emailed to your lender.

  15. Lender will email a “VC” sheet to your Realtor with any lender required repairs.

  16. Negotiate any lender required repairs.

  17. Lender required repair addendum accepted and the purchase continues.

  18. Licensed contractors, sellers and/or buyers complete lender required repairs.

  19. Re-appraisal is done to verify that all lender required repair work is completed.

  20. Your lender will be notified by the appraiser when the work is completed.

  21. Your lender will coordinate a closing, or settlement, time and date with you, the sellers, both Realtors and the title company.

  22. Your lender will email all of the pertinent documents to the title company  days prior to the closing date.

  23. You will receive the Closing Disclosure a minimum of 3 days prior to closing.  The Closing Disclosure outlines your costs of purchase.
  24. Closing at the title company where all documents are signed by both the buyers and the sellers and title is transferred into your name.

  25. Congratulations, you’ve achieved the American Dream of homeownership and the purchase process ends.

 

ABOUT THE OWNER AND BROKER OF HOME RUN REAL ESTATE:

Lloyd Reed has been a licensed Real Estate Agent in the Grand Rapids and West Michigan areas for 15+ years and loves to sell real estate. He is the broker and owner of Home Run Real Estate and one of the primary brokers for both the Inner City Christian Federation. Lloyd, along with his team of top real estate consultants specializes in helping first time home buyers, HUD home buyers, motivated home sellers and real estate investors accomplish their real estate goals. His team consistently ranks in the top 5% of all real estate agents nationwide in both real estate sales and real estate transactions. For more information on Lloyd Reed and Home Run Real Estate’s All Star Services you can visit www.HomeRun-GR.com or call 616-889-7662. Home Run Real Estate is located at 5500 Northland Dr. NE Suite A, Grand Rapids, Mi 49525.

March 25, 2010

Understanding the meaning of “agent” is the first step toward success…

 

Real estate transactions rank among the most important financial moves that most people will ever make. As a real estate professional, I understand this and want you to be fully aware of your representation options.

In real estate, “agent” refers to the nature of the fiduciary responsibility that exists between you and your chosen real estate professional. Having a complete understanding of this relationship is the first step toward working together to achieve your real estate goals.

A real estate professional becomes your agent only after a legally-binding document is signed by both parties. As your agent, that REALTOR® has a legal obligation to protect your best interests in every facet of the transaction.

Real estate professionals traditionally worked as agents of the seller, not the buyer. Their loyalties and responsibilities were only to the seller. REALTORS® working with buyers acted as “sub-agents” of the seller.

That has changed. Today’s buyers often retain real estate professionals to represent their own financial and legal interests when purchasing a home. The term is “buyer’s agent.”

Whether you’re a buyer or a seller, call me today to learn more about the benefits of having an agent on your side for all of your real estate transactions.

ABOUT THE OWNER AND BROKER OF HOME RUN REAL ESTATE:

Lloyd Reed has been a licensed Real Estate Agent in the Grand Rapids and West Michigan areas for 15+ years and loves to work with home buyers. He is the broker and owner of Home Run Real Estate and the primary broker for both the Inner City Christian Federation and Habitat For Humanity Of Kent County. Lloyd, along with his team of top real estate consultants specializes in helping first time home buyers, HUD home buyers, motivated home sellers and real estate investors accomplish their real estate goals. His team consistently ranks in the top 10% of all real estate agents nationwide in both real estate sales and real estate transactions. For more information on Lloyd Reed and Home Run Real Estate’s All Star Services you can visit www.HomeRun-GR.com or call 616-217-4166. Home Run Real Estate is located at 5500 Northland Dr. NE Suite A, Grand Rapids, Mi 49525.