Anyone who has ever bought or sold their home knows that there are a lot of financial and emotional areas to consider. Every step along the way there are decisions to be made that will affect the financial outcome of real estate transactions, and your REALTOR® will be a valuable source of information.
Whether you are buying a home or selling a home it is both a financial and an emotional matter. Buying a home, especially your first home, can be an extremely emotional time. It is exciting and at times may seem over whelming, but it is important to keep a balance between the financial considerations and the emotional issues. Your agent can be a great asset during this process and clients should be comfortable turning to their agent for that information.
For example: Before a buyer makes an offer on a house, the buyer’s agent should do a CMA (Comparative Market Analysis) to determine if the asking price is reasonable and to ensure that the buyers are not offering more than what is reasonable. Many times home buyers will “fall in love” with a house and they will want it at any price. Unless the buyers have cash or at least a sizable down payment, they will still have to have an appraisal for the house in order to get a mortgage. Mortgage companies do not operate on emotion!
Remember, the seller’s agent most likely did a CMA and advised the sellers what the home would reasonably sell for, but it is the sellers who make the ultimate decision as to the price to list the home for. Finding common ground between the sellers and the buyers can be a tough negotiating time and the agent can be a good buffer between the two parties.
I had clients several years ago that were looking to buy their first house. They were excited and had thought through the process and were approaching the buying experience very rational. While showing one of the homes I noticed that the couple became very quiet as they were looking around, and you could tell this was going to be the house. After a few minutes the husband said rather quietly “…and we could put the Christmas tree right here.” To any buyer’s agent, that is a good sign, they are personalizing that house into their home. But this home had a basement that was not finished and would require a considerable amount of expense on the part of the buyers that may have put it out of there reach.
That weekend they wanted to look at the house again and decided to put in an offer that to me seemed reasonable, but was down sufficiently to help with the cost of finishing the basement. The sellers countered, but with a price that the buyers just did not want to go to.
I remembered during the time they were looking at the property that both of the buyers said their fathers were very handy at construction and could certainly help finish off the basement. I approached them with the idea that if the sellers would provide the raw materials needed to finish the basement, would they be able to finish off the basement themselves? They were positive that would be possible and their excitement returned that maybe, just maybe, they would be able to buy this house!
During the negotiation process, the buyers made a list of the raw materials they needed to finish off the basement. The sellers purchased those items from Home Depot and had it delivered before the closing and we were able to complete the transaction and both sellers and buyers (and agents) were happy. The point that I am trying to make is that many times there are strategies that agents can do to help with negotiations. Use your agents expertise to be a buffer between the sellers and buyers. We want these transactions to be a win-win.
In another example, I was representing the buyers and were looking at a house that was very nice, but the rooms were painted, lets just say, according to the sellers taste. The buyers wanted to look at the house, but the seller was unable to leave at that time and said she would just stay in the back ground (but of course, within hearing range). The buyer – wife made the comment that they would have to repaint the interior and of course the seller – wife heard that and was offended that the buyers did not like her “designer” paint. If you have ever seen a verbal cat fight, that is what I had on my hands. In this case, the buyers did not buy that house. The truth of the matter is paint is a relatively inexpensive fix to a house that has a color you don’t like.
Once emotions start ruling decisions, it is difficult to find common ground. Your agent will be in a good position to help guide you and negotiate on your behalf – use your agent. They can be a tremendous help
As always, if I can help with any of your real estate questions or needs, please don’t hesitate to contact me.