Bakersfield Real Estate

I Need to Price My Property High So I Will Have Room To Negotiate!

2010-08-04T17:51:00Z

When it comes to selling a home most sellers want to make sure the amount advertised reflects the price they paid for the home, upgrades, maintenance, location, beauty, real estate fees, and profit. The seller can ask any price they want for their home, but will the buyer pay it? I have shown many sellers a Comprehensive Marketing Analysis (CMA) and color photos of the exterior and interior which estimates the price of the home to be $200,000, only to have the seller reply “see this proves my house will sell for $299,900 - besides I need to price my property high so I will have room to negotiate.”

The seller looks at their home t rose colored glasses. That white tile that was popular in the 80’s may only measure 3x6 ft in the entryway, but that seller believes it is custom. Oh, the bathroom has a stock door instead of a window, must be custom! The kitchen has a built-in hutch. Must be custom, we’ve never seen that in a house before! The patio was built in weekend by the husband and a few friends in exchange for pizza and beer. Must be custom! We won’t even discuss the fact that the patio does not have a permit, and was not built to code!

What about all the maintenance the seller has put into the house? During the 15 years the seller lived in the house the carpet, water heater, fence and appliances were replaced. The seller definitely believes this increases the price of the home. It does not matter that when the seller bought the home all these items where in decent condition, the seller just wants to be compensated for the money they put into the house!

Oh, the neighboring houses have pools. “Who wants a pool?” The average temperature is 105° in the summer, but the seller’s home can’t be worth less because they don’t have one! The neighbors have granite counter tops and the seller has white 4x4 tile counters. “Well”, the seller replies “my tile is in good shape and besides I put in new appliances 8 years ago.” (Which are towards the bottom-of-the line appliances). When the seller compares their house to a house in a far better neighborhood or to square footage that is much greater than theirs, they just look at you blankly and continue with their comparison, even after you explain why that particular home is not a good comparable.

So what happens when a buyer actually wants to buy the house at the over-inflated price? The bank doing the loan sends out an appraiser to make sure the home is valued at the price the buyer wants to pay. Since the bank is actually putting up their money, they want to make sure the house is a worth what they are investing. If the house does not appraise the buyer has to make up the difference between the contract price and the appraised value out of pocket. Since most buyers just have enough money for their down payment and cost of loan, they are unable to make up the deficit. This presents the seller a choice. Lower their price to the appraised value or look for another buyer, which will only lead to the same scenario in a few months.

After the house has been on the market and few buyers are touring the house, the seller is forced to make a decision: take the home off the market or lower the price. If the seller lowers the price to where it should have started, now the buyers are not even interested in the home because they see that the home has been on the market for over 100 days. “There must be something wrong with the home or it would have sold earlier.” If the seller has to sell, he then may decide to lower the price even below the first price that was suggested to him. Perhaps a bidding war would have occurred if the house was priced aggressively from the beginning, and the seller would have made more money. Too much time is lost, the seller is frustrated, and money is lost due the fact that the house was not priced correctly to begin with.

Do You Need A Realtor When Buying New Construction?

2010-01-22T17:45:00Z

The smell of new carpet, paint and brand new appliances can make a home buyer’s mouth water. Walking through a model home with the smell of cookies baking and the latest fashion in furniture makes us all desire a new home. Kids room so tidy as to make you want to adopt the make believe children of this uncluttered bedroom. After spending a half hour roaming from model home to model home we are ready to sign on the dotted line.

How many of you house hunters have strolled through those gleaming rod iron fences into the model homes on a sunny spring day? You may have gone out with your Realtor that morning, but you still have the house hunting bug in you. So you pop in a model or two. The construction company’s real estate agent greets you with a friendly smile and asks you to sign their registration card. You are so primed to see new homes and it seems so harmless, so you fill out the card and hand it back happily as you go through the nine foot arched door.

STOP! Did you know you just gave away your rights to be represented by your own Realtor? At the moment you are asked to sign the registration form you should reply “I am represented by Realtor
---------------.” The construction company agent will put that name on the card and then ask you again to fill it out. Now if you decide to buy with that new home you will be represented by a Realtor of your choice at NO COST TO YOU.

So, why have your own real estate agent? Buying a home is one of the biggest investments you will make in your life. It will affect where your kids go to school, your daily commute, your financial budget, possibly your marriage and much more. A Realtor can give you advice as to whether the neighborhood will remain an area you will be happy with in the future or it is a neighborhood that will possibly not retain its value. You may not be aware of the new freeway planned to go in behind the subdivision.

Your Realtor can help you negotiate a lower price or extra amenities. Once you come to an agreement on price your real estate agent can help you understand the 50 page stack of papers the model homes agent will give you to sign. Agents also act as couriers to make sure you are not inconvenienced. Agents are not inspectors, but they have walked through so many homes that they can help you inspect the home for a punch list.

Remember, you will be represented by your own Real Estate Agent at no cost to you in possibly the biggest purchase of your life!

Diane White

Prudential Tobias Realtor

www.BakersfieldHomeSearch.com

Short Sales Revisted

2008-03-09T17:54:00Z

Over the past year short sales have been a very difficult with little success, but the tide is changing. Now that there are so many foreclosures occurring, banks are now starting to play ball when it comes to a short sale. Yes, they are still difficult but more and more are going through. The difference is some agents are now employing companies that only deal with short sales to aid in the transaction of a short sale. There may be tax liabilities in a short sale to the seller, so the seller should talk to a tax consultant before going through with a short sale.

The New Buzz Word “Short Sale”

2007-08-29T20:48:00Z

Many of my clients call me and request a list of Short Sale listings. When I ask them if they “know what a Short Sale is” the response is usually, “the sale will be fast”. That is usually quite the opposite. Try one to six months!

A Short Sale has nothing to do with time! Rather it is the Seller selling their home “short” of the amount of money owed to the bank. The Seller is trying to avoid a Foreclosure.

Why would a bank agree to take less money? If the bank will lose less through a Short Sale than a Foreclosure there is a chance the bank will agree to accept less money.

Is this the answer to our housing woes? No. The lending companies look at different aspects as to whether they will agree to a Short Sale:

♦Is it in the best interest of the lending institute?

♦Why is the seller in financial straits?

♦Does the seller have a 401K, savings, stocks, other real estate holdings, or anything that will allow the seller to continue paying on the loan?

♦If there is a second lender, will it agree to the sell or will it say no to the sell?

Whew! The sale went through; the Seller’s problems are over. Not quite. The Seller may now have a tax liability. The loss the bank incurs could now be considered a gift to the Seller. The Seller should seek the advice of a tax consultant or lawyer before choosing the Short Sale route.

Diane White

www.BakersfieldHomeSearch.com

Prudential Bakersfield Realtors

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2006-11-01T20:31:00Z

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2006-10-06T23:36:00Z

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