Jim Valentine: Determining what is important
People buy and sell homes for a variety of reasons. Price is important to most buyers and sellers, but it isn’t always the driving force of their transaction decisions. The construction of an offer that will separate you from the crowd in a competitive market is critical. Including details and/or features in the offer that will have more appeal to the seller than other offers can get you the home you want.
Price is an easy one to evaluate. Sellers want as much as they can get and buyers want to pay as little as possible. Somewhere in between is what a willing buyer and willing seller will agree to, market value. If you have cash, you might get a discount or it might just get you the opportunity to pay full price, or more, to get the home you want instead of somebody else enjoying the habitat you covet.
What can be more important than price? Sometimes sellers like one buyer over another. Perhaps it’s the young couple getting started in homeownership, or the party that commented that they love it just the way it is. It is amazing how often residential real estate is directed by emotional decisions rather than rational analysis of the benefits. Investors rely on the numbers, but homeowners selling their personal residence can build up immeasurable emotional ties to a home that influence their selling decisions.
Cash is king in real estate. There is no loan approval or appraisal to be concerned with; the buyer makes one easy payment and it’s done. For that reason, a cash buyer often has an advantage, but that isn’t always the case. If the cash buyer is wearing the logo of a team that the seller doesn’t like and another buyer likes the same team as the seller, buyer number two might find himself in the first position. Homeowner emotion. It happens.
Occupancy can be a factor. Sellers might want to sell but aren’t ready to vacate immediately. If a buyer can allow them time to stay without compromising their living situation, they can have a distinct advantage over the buyer that has to occupy immediately. The converse is true as well — the buyer that can vacate quickly can get a better offer from the person that needs fast occupancy.
Other situations that come up that can sway offer negotiations can be accepting a property as is, even with extensive debris. Sometimes it is because of the extensive debris being accepted that the offer goes through. Someone moving from a home to an RV may take an offer including furniture over one that excludes it so as to save the moving, selling or storage hassle of keeping the furniture. All of these things relate to personal time, convenience, labor and emotion. These issues are often more important than money.
Seller motivations can include family matters, financial matters, job matters, emotional matters, legal matters and more. Whether it’s health, the Internal Revenue Service, a sick relative or whatever, when these things come up they usually drive the decisions more than maximizing the financial consequences of the transaction. If you know what their motivation is, you will know best how to construct your offer to help them get on with their lives.
Our advice: As you gain information in a transaction, it is important that you use it for the benefit of all. Getting tactical to get the drop on someone might get you a good price, but if anything comes up along the way, you might find resistance in a resolve. Working together for a healthy win/win is so much better in the long run. That can include getting a really low price … if it is in the interest of and helps the seller in their circumstance. It isn’t always price, but it is always about benefits to the parties. Play nice and live happily ever after.
Real estate involves big dollars and big emotion. Your agent can help you manage both if you are candid and open. When it comes to choosing professionals to assist you with your real estate needs … Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. email@example.com