In real estate transaction, there are many reasons why you can encounter turbulence. Today, we're going to talk about the kind of turbulence that happens when a buyer falls in love with a house, and wants to write an offer, and doesn't know what to offer.
Yeah, yeah. It's an interesting path it seems like that buyers go down. It's both emotional, and mathematical, and financial. They all play in, and Jon, I think when you referred clients to me on the loan side, we go through a lot of the numbers, and so people are thinking of the numbers, and then very often the question circles back to me, "Well, we like this house on 123 Elm Street. They're asking 220, what should I offer?" And immediately, the stay in your lane light starts blinking in my head, and we talk a little bit about how things go, and there's not an automatic reduction in asking price versus offer. And of course, referring back to the experts yourself and say, goodness, it all comes down to how motivated you are, but then also where's the price in the market?
Well, and that question invariably comes up to you a lot because they're curious what's my payment going to be? With taxes and insurance, what am I looking at monthly payment wise? And so, I think that question it comes up to you sort of by default of, well, so it's listed at 220. What do you think we can get it for? And then, can you run the numbers for us? When it's kind of out of order, right? They should be talking with you to kind of figure out a scenario of maybe a range. If I offer full price, what's my payment going to be? If I offer this, what's it going to be? So, just for their own knowledge. And it's good that they do that because they should know kind of what they're looking at. So, that's good, and I would not discourage a buyer from doing that who wants to know what they're looking at.
But there's a lot of factors obviously that go into what you should offer on a property. And if it's a day on the market, good luck getting a discount from list price on that property. If it's been on the market for awhile, well, there may be some room to negotiate. There are different reasons why things are priced the way they are. Sometimes it's a matter of reaching out to a listing agent to find out what the seller's motivations are. If they're willing to share that. Some listing agents don't share anything, and are incommunicado, and they do their seller a disservice by not answering phone calls or calling people back.
And then, other times you have realtors that are very willing to talk. Not that they're doing anything to breach the confidentiality with their seller, but to be able to have a conversation just to figure out what the seller's doing, and why it's priced at where it's at, especially if it's been on for a long time.
Now, one of the things though that I like to do for my clients is run comparables. What's sold recently that's similar? Sometimes an area, let's just take Royal Oak for instance. Royal Oak, you typically have a lot of comparable properties that have sold in and around the area. So, pretty easy to know what a comparable is. And even though I may be really, really familiar with an area, I still want to just double check real quick just to make sure what we're looking at, apples to apples.
Every house ... Now, one could say that the bungalows in Royal Oak are all cookie cutter. They're all the same. Not so. some of them, well you know, our mutual friend and client who bought a bungalow in Ferndale. Now, one could say every bungalows is similar in Ferndale, but have you been in his house?
Avoiding Real Estate Turbulence
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