There are so many attractively priced homes to buy in the Tallahassee real estate market, so how do you decide which one is the best buy? There are so many infomercials and advertisements claiming that you can buy a home for mere pennies on the dollar that many potential home buyers are confused about what they should do.
The goal of this short article is to help you develop a mindset that will allow you to buy the home of your dreams without paying too much for the home. Please note that this goal is two-fold:
- Buy the home of your dreams
- Do not over-pay for the home
Most people think that they can avoid over-paying for the home by writing a low-ball offer, but in most cases this creates an adversarial relationship with the homeowner and does not result in the acquisition of the dream home. I believe you can do both.
Low Ball Offers Rarely Result In Home Sales
Most people wrongfully assume that getting a great buy in real estate requires them to go out and find a homeowner that will take an offer that is substantially lower than the asking price. You see, this fallacy is created by people that have no clue as to how the real estate market really works.
The Best Real Estate Buys Come From Motivated Sellers
Even in today’s real estate market, where inventory levels are at an all-time high in many parts of the country, there are homes that are selling for more than the asking price. These homeowners have listened to the advice of savvy real estate professionals who know how to sell a home, even when the market is seeing fewer than 1 in 3 homes on the market receive a contract.
As an example, there are nearly 3,000 homes for sale in Tallahassee. Most of these are overpriced and are being offered for sale by homeowners who have not reconciled with the fact that their home has dropped in value from where it would have sold at the top of the market. Were you to offer a low-ball price to most of these, they would either ignore it or counter-offer back at a price that is too high in this market.
Only Look At Homes That Are Priced To Sell
This is the big secret. Limit your viewings to homes that are priced to sell. This tells you that you have a motivated homeowner and that he or she understands what the home is worth. While a lower percentage of homes are selling, there are still many homes that sell each day. Low-balling a well-priced home will not only fail to get you the home, it most likely will guarantee that you lose it. A great listing real estate company will “shop” an offer to all previously interested buyers, thus using yours as a benchmark to beat.
Knowing How To Make A Compelling Offer To Purchase A Home
Perhaps the biggest help your real estate company can provide to you is the selection of the homes for you to view. Too often, I see prospective buyers become “emotionally attached” to a home for sale that is priced way too high. The buyer makes a fair market value offer (which the unmotivated seller deems as low-ball) but has no chance of getting the home without paying a price well-above market.
Once a buyer has found a well-priced home in which the buyer would like to live, the offer should be made so compelling that the seller is concerned about losing the buyer. If the home is priced below market, do not be afraid to offer full price or more. If the home is right at the market, the buyer needs to make a decision based upon all the other homes that can be purchased if the desired one is lost. The key is to work with somebody who understands the real estate market in its current condition.
By eliminating all of the unmotivated sellers, the buyer can comfortably shop the great buys in the market without the fear of over-paying. This is most likely the greatest cause of stress for the buyer, so eliminating this fear is paramount.
Compelling Offers Are Needed In Short Sales Too
This advice holds true for short sales (where the seller receives less money at closing than is required to repay all of the debt on the home). In a short sale situation, the seller will most likely sign anything, but the offer is subject to approval by the bank holding the mortgage(s) on the home.
CENTURY 21 First Realty created a short sale department over a year ago when we saw the direction the market was heading. We have helped many families in their short sale needs thus far, and we continue to see more of these unfortunate situations occur for troubled homeowners.
Make sure your real estate company has vast experience with short sales. Most will say they do, but the fact is that most REALTORs have done one or fewer short sales in their career. We are seeing some amazing, below-market sales in our short sales department, but buyers are having to wait much longer to close and have several other key actions they must take. Knowing how much to offer the bank is the secret to winning when buying a short sale.
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Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.
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Well written article. We are seeing the wide eyed deal shopper out here in Tucson AZ looking to make a killing by putting in ridiculously low ball offers, only to be rejected.
Thanks Paul. Is suspect that might be the “norm” everywhere in the country. It has been my experience over the years that most low ballers are not real buyers and they would panic if somebody accepted their offer.
You hit the nail right on the head! If you are going to sell your home and there is a chance that it’s going to be a short sale, your REALTOR must be proficient in short sales. Make sure you interview several agents and ask them how many short sales they have been involved with and the 2nd question you need to ask is how they will advertise your home.