Real Estate Investing

An always fabulous agent I work with told me recently about one of her closings.  She found a home for her buyer that had first been on the market for $145,000.  Following the market downward, it was reduced after several months to $130,000 in order to remain competitive.

Her buyer wanted this home, so they wrote a contract.  In the contract, they asked for 3% ($3900) in down payment assistance and 3% ($3900) in closing costs.  They also asked for a home warranty, a $1000 repair limit, termite inspection (we’ll say $75, but could be up to $800 depending on whether termites were found), and for the seller to pay for title expenses (another $1200).

This once $145,000 home was being purchased for

… drumroll …

$119,925 after the seller paid all of the concessions on behalf of the buyer.

That was $25,075 less than the original list price.  BUT because the market sets the price - and in fairness - the number would be $10,075 off the list price.  So the buyer made a full price offer on paper, and yet it was not a full price offer.

It got back to my friend the agent that the buyer’s father fussed at everyone he met because the agent didn’t get her son a “good enough” deal in a buyers market.  I beg to differ.  That she saved his son over $10,000 dollars from the list price was a pretty fabulous deal.

Yet there are always people who argue that it wasn’t enough.

Another friend of mine wrote a comment to me about full price offers saying, “No one should ever pay full asking price for anything that lends itself for negotiation possibilities…..there is always someone willing to wiggle….keep looking.”  I respectfully disagreed with her given the scenario outlined above.

I believe people need to always remember that just because you see something on paper, it doesn’t tell the whole story.  A full price offer may appear to be full price, but when a seller walks away with over $10,000 less than expected, they are not receiving full price.

Of course, you can also ask yourself how badly you want a house.  Even in a strong buyers’ market, homes in your price range in safe neighborhoods may not be available, so you do what you have to do.

I urge buyers and agents to never let the naysayers convince you that you made a mistake because only you know and have the complete picture of what your needs are.

Photo by Kathy T. and her blackjackii phone. Special guest: the calculator.

Families naturally want to be with a buyer when they are ready to find a new home.  Parents can be very supportive, but there are some who believe that if their baby buys a home, they’ll lose them forever.  Those parents do whatever it takes to scare and intimidate a buyer. 

Besides parents and in-laws, children may be the other biggest impediment of a house-search.  If you must bring the kids, here are some tips about making the trip easier.  However, here are my Top 10 “Reasons You Should Not Take Your Children With You when Househunting.” 

1. A decision as important as buying a home needs your undivided attention.
2. The seller may feel very uncomfortable about children running through their home, especially if they have pets.
3. The Realtor feels great stress when your child(ren)  touch and pick-up everything.
4. Children have to make frequent bathroom stops (Every ten minutes is too often!).
5. Sometimes they don’t make it to the bathroom stop.
6. When you have a teenager with a cell phone, the constant beeping of incoming text messages will drive one nuts.
7. When you have a teenager without a cell phone, the constant haranguing about turning the radio UP is nerve-wracking (not to mention the lyrics which make one say, “What did he say?” or “Did he just say what I think he said?”).
8. The temper tantrums can induce a migraine for your Realtor!
9. The spills in your Realtor’s car don’t easily clean (soured milk in the heat is not a pretty smell).
10. It’s not fair to the children to force them to sit in a closed space for hours and hours.

Leave the next generation with a babysitter when you tour homes!  And here’s what you CAN DO to help make the at-home kiddos feel more comfortable about moving.

Have car with full tank of gas, will travel.  After yesterday’s very interesting showing instructions, arguments, and additional comments I thought I’d share the results of these specific house searches with you.

1. No showings until 4:00 p.m.  We didn’t go see and won’t go back.  But we knew that yesterday when they said we couldn’t see it until after 5:00 p.m.
2. Key hidden under rock.  What a beautiful, loved home it was.  Unfortunately the back yard goes straight down and will be too hard to mow (but check out the gorgeous photo of the jogging ring!).
3. Something smells dead.  Yes, like a mouse maybe or squirrel even.  But the house was amazingly beautiful.
4. The doors stick.  We couldn’t even get in because the part I left off was “don’t lock bottom lock.”  Someone did lock it and the frame of the door came over so that we couldn’t get key in to unlock.  We’ll have to take their word for it that the doors stick.
5. Don’t go into the basement.  We didn’t.  Actually we didn’t go at all when we read more information about the property and saw that it didn’t have central heat and air.  I felt bad about skipping it, but we must have cool air when the temperature is 105 degrees and the humidity hangs at 99 percent.

Thankfully we didn’t experience anything scary this go-round.  Like Doreen.  Or anything suggestive.  Like Marianne.  Have you had any interesting experiences while looking for a home?