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Frequently
Asked Questions
Selling Your Home - Q & A
Negotiating
Q.
Is a low offer a good idea?
A. 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.
Q. What is
the difference between market value and appraised value?
A. Appraised
value 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.
Q. What contingencies
should be put in an offer?
A.
Most offers include two standard contingencies: a financing contingency,
which makes the sale dependent on the buyers' ability to obtain
a loan commitment from a lender, and an inspection contingency,
which allows buyers to have professionals inspect the property
to their satisfaction.
A buyer could
forfeit his or her deposit under certain circumstances, such as
backing out of the deal for a reason not stipulated in the contract.
The purchase
contract must include the seller's responsibilities, such things
as passing clear title, maintaining the property in its present
condition until closing and making any agreed-upon repairs to
the property.
Q. How is
the price set?
A.
It's very important to price your home appropriately relative
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 comparative
market analysis provides the background data on which to base
your list-price decision. Study the comparable sales material
presented to you by the different agents you interviewed initially.
If the analyses are more than two or three months old, have your
agent update the report for you.
If all agents
agreed 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.
Q. What is
the best time to sell your house?
A. In
addition to supply and demand, and other economic factors, the
time of year 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
are less of a consideration in more temperate climates, but most
of the time, the real estate market picks up as early as February,
with the strongest selling season usually lasting through May
and June.
With the onset
of summer, the market slows. July is often the slowest month for
real estate sales due to a strong spring market putting possible
upward pressure on interest rates. Also, many prospective home
buyers and their agents take vacations during midsummer.
Following
the summer slowdown, real estate sales activity tends to pick
up for a second, although less vigorous, fall market, which usually
lasts into November when the market slows again as buyers and
sellers turn their attention to the holidays.
Sellers often
wonder whether or not they should take their homes off the market
for the holidays. Generally speaking, you'll have the best results
if your house is available to show to prospective buyers continuously
until it sells.
Q. Are low-ball
offers advisable?
A.
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.
Q. Do I have
to consider contingencies?
A. 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.
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