Myth 4/7: Always leave room for negotiation after inspections

It’s common to think that the seller has left room on the table for future price negotiations after the property has been inspected. Therefore, as the myth would have it, a buyer should also leave room to negotiate after the property is inspected. Every buyer goes through this thought process when negotiating the home purchase. But when they follow this approach, they’re bound to get burned.

Many of today’s sellers go through the motions of getting their home in top shape before going on the market. This includes fixing the leaky water heater, replacing or repairing the roof or completing a list of “fix-it” items prior to listing.

Sellers want a sure thing with their buyer. A good agent will work with them to make sure the home is foolproof prior to listing. If the buyer leaves $15K on the table with hopes to negotiate afterwards and the inspection comes out flawless, they will be in trouble. A seller with a solid home and a clean inspection isn’t likely to negotiate with that buyer again. In a strong market, a buyer who tries to renegotiate won’t be taken seriously.

Agents should advise their buyer clients to be happy with the final price offered to the seller. It may happen that there are issues after the inspection and some credits come the buyer’s way. But counting on those credits will only waste everyone’s time when the inspection comes back clean.

Excerpt from Zillow Article

 

Myth 3/7: Spring and fall are the best time to buy

Many years ago, real estate markets revolved around school cycles and summer. People wanted to move during summer so their kids could be settled in and start school by September. For this reason, spring has always been seen as the main selling season. Summer was usually slow, so the fall brought a second opportunity for buying and selling.

Some buyers (and sellers) still organize their activities around this myth. They pull away in the summer as well as during winter. With so much information online today, however, markets move much faster and a buyer can look at real estate 24/7 from a mobile device on their couch. As a result, serious buyers are in the market all the time. (The not-so-serious buyers come and go when it’s convenient.) Homes listed in November or January could be listings of highly motivated sellers. Some buyers have their hands in a real estate transaction all the way up to Christmas, and a seller who has a home listed then must be pretty serious about selling.

The bottom line: Shopping in the dead of winter or the middle of summer can present great opportunities for today’s buyers. With less competition in a market dominated by serious sellers, an aggressive buyer can snag a great deal in summer or winter.

Excerpt from Zillow Article

Myth 2/7: Buyers should never offer full price

It’s impossible to have an across-the-board strategy for pricing and negotiating real estate. For starters, every real estate market is different, as is every seller’s approach to pricing. In many parts of the country, for instance, it’s a red-hot sellers’ market. Many times, sellers will purposely price their property right at or just below market value to get multiple buyers interested. When buyers try to offer, say, 5 percent under market value when everyone else is offering full price or more, they might be looking for a home for months.

Also, if a listing is brand new, the seller may expect not a penny under asking. The first two weeks to a month are when the seller sees the strongest activity. When a buyer offers too far under asking out of the gates, they’re likely to lose out.

In slower markets, it’s not uncommon for a seller to price a home well over the market value and wait it out. If a buyer offers 5 percent off a home that is overpriced by 10 percent, the buyer risks overpaying. This is why it’s important that buyers work with an experienced local agent and never take a one-size-fits-all approach to pricing and negotiating.

Excerpt from Zillow Article

3% Down Payment Loans May Come Back

A Fannie Mae and Freddie Mac regulator has said that 3% down payment loans are just as safe as loans with higher down payments!


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Myth 1/7: Working directly with the listing agent will get the buyer a better deal

Many people today figure that with real estate listings published online, the buyer’s agent’s role is irrelevant. By searching and researching independently, buyers going directly to the listing agent assume they can negotiate a better deal by cutting out the middleman—the buyer’s agent.

The role of the buyer’s agent was never solely about accessing listings, of course. A good buyer’s agent has always had their feet on the street and keeps a finger on the market’s pulse. They know the comps and the other agents, so they can add an incredible amount of value simply through sharing their experience and knowledge.

Buyers, left to their own devices, “don’t know what they don’t know.” A good buyer’s agent can step in, track the buyer’s process and help uncover some of the unknowns about a particularly house, an agent or the market in general. A good agent has years of market and transaction experience in their head. Additionally, the seller is going to pay the commission whether or not there’s a buyer’s agent. For the buyer, then, there’s rarely any savings by going without an agent. Instead, the listing agent simply makes double the commission. There’s no savings to the seller, either, when the buyer doesn’t have an agent.

Also, by having a listing agreement with the seller, the listing agent is looking out first and foremost for the seller’s interests, not the buyer’s. By working with an agent (at no cost), the buyer gets an advisor/advocate working to represent their best interests.

Excerpt from Zillow Article

Go West Young Man! (Or at least get warm)

The famous cry of our ancestors seems to be the way people are moving lately.  Since this is a story by a moving van line, I would think we can discount DC because of all the moving in and out there.  However, there aren't too many people moving from Arizona to Maine...
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Prices are Flat since last year, However...

January 23 - The average list price per sq. ft. for Greater Phoenix non-distressed listings under contract is just under $145 today. One year ago it was also just under $145. This shows us that pricing for homes going into escrow has been close to flat for the last 12 months.

However we are seeing fewer price cuts for active listings than we saw in January 2014. The current weekly rate of price cuts is about 2,300 per week while last year 2,900 per week was typical.

Overall we would say pricing is holding steady, as you would expect with the Cromford® Market Index close to 100.