Q: "Recently, I lost out on a house in a multiple bid situation. When I found out there was another offer, I freaked out. What advice can you offer me for the future, in case this happens again?"
A: Multiple bid situations are tricky. Sellers who receive more than one offer have several options: they can accept the best offer, they may counter one offer while putting the others aside, they can ask all parties to submit their ‘highest and best’ offer, or they can negotiate one offer while rejecting the others. They can even disclose the amount of one offer to the other buyers in the hopes of getting the price up (Although this is not a common practice in this market, it is routinely practiced in other markets).
Being a buyer in this situation can be frustrating. Keep in mind that the amount of your offer is only one part of the offer package. Oftentimes, other terms like the closing date or financing contingencies, can carry as much weight for the seller as the amount of your offer. If two offers are the same amount, but one is offering cash while the other is dependent on financing, the seller may opt for the cash offer so as to ensure a more expedient closing. Try to keep your terms as simple and ‘clean’ as possible.
It is important that you try to remain as unemotional as possible when you make an offer. Study the comps and decide ahead of time what price you would go to and stick to it. Don’t let the competitive bid scenario cause you to offer an amount outside your comfort zone. By the same token, when you are in a multiple bid situation, don’t waste time getting to that number. We have seen buyers lose out on properties because they did not go right to their ‘highest and best.’
You may feel that the seller has all the power in these negotiations but remember this: you are always in the driver’s seat when it comes to spending your money. Keep in mind that inventory is high these days, and if you miss out on your #1 choice, it is likely that another property will come along that meets your needs.
Thursday, September 25, 2008
Thursday, September 18, 2008
Increased Inventory
Q: "Lately, whenever I come to the Cape, it seems like I am seeing more and more For Sale signs. Are there more properties on the market or is it my imagination?"
A: Inventory in the three Outer Cape towns is up 25-35% from just six months ago. This increase mirrors the national trend, but also reflects the uniqueness of the Outer Cape market. Many of the properties on the Outer Cape are second homes, and many sellers are in a position to hold on to their properties if they do not get their price. While sales volume is up in Provincetown YTD (year to date) over last, the total volume for the three towns is down 7% YTD.
What does this mean for buyers and sellers? Well, if you are thinking of buying, the increase in inventory is a positive thing. You have more to choose from. Even though many sellers don’t HAVE to sell, there are many who are motivated and realize they can stand out from their competition by pricing their properties aggressively. If your offer isn’t accepted on your #1 choice, your #2 choice will likely be just as desirable considering the amount of inventory you have to choose from.
As a seller, you need to be aware of how many choices there are for buyers these days. Some of your competition is including bonuses to buyers, like covering closing costs and prepaying a year’s worth of condo fees. If you are serious about selling, price your property competitively. If you don’t need to sell and you are holding out for a high price, you are better off taking your property off the market until conditions improve. You will stand to make more in the long run and you will keep your listing from gathering dust.
A: Inventory in the three Outer Cape towns is up 25-35% from just six months ago. This increase mirrors the national trend, but also reflects the uniqueness of the Outer Cape market. Many of the properties on the Outer Cape are second homes, and many sellers are in a position to hold on to their properties if they do not get their price. While sales volume is up in Provincetown YTD (year to date) over last, the total volume for the three towns is down 7% YTD.
What does this mean for buyers and sellers? Well, if you are thinking of buying, the increase in inventory is a positive thing. You have more to choose from. Even though many sellers don’t HAVE to sell, there are many who are motivated and realize they can stand out from their competition by pricing their properties aggressively. If your offer isn’t accepted on your #1 choice, your #2 choice will likely be just as desirable considering the amount of inventory you have to choose from.
As a seller, you need to be aware of how many choices there are for buyers these days. Some of your competition is including bonuses to buyers, like covering closing costs and prepaying a year’s worth of condo fees. If you are serious about selling, price your property competitively. If you don’t need to sell and you are holding out for a high price, you are better off taking your property off the market until conditions improve. You will stand to make more in the long run and you will keep your listing from gathering dust.
Thursday, September 11, 2008
Real Estate Stamps
Q: "What are real estate stamps and why do I have to pay them?"
A: Stamps are the taxes a seller pays when selling their home. The current rate in Barnstable County, Massachusetts is $5.70 per thousand dollars. If you sell a home for $600,000, your tax would be 600*$5.70, or $3420.00. The county uses the revenue generated from the tax stamp for human needs and social services for towns in that county.
This tax is a law and must be paid at registry of deed before a sale is recorded.
A: Stamps are the taxes a seller pays when selling their home. The current rate in Barnstable County, Massachusetts is $5.70 per thousand dollars. If you sell a home for $600,000, your tax would be 600*$5.70, or $3420.00. The county uses the revenue generated from the tax stamp for human needs and social services for towns in that county.
This tax is a law and must be paid at registry of deed before a sale is recorded.
Thursday, September 4, 2008
Pay It Forward?
Q: "Should I extend a gratuity to a carpet installer, plumbers, carpenters, painters and other contractors who work on my house?"
A: Contractors who come to your house for a one time project such as carpet installation, window installation, hardwood flooring or appliance delivery, usually do not expect a tip. Some companies forbid their workers from accepting gratuity.
When contractors renovate or do minor electrical, plumbing or painting jobs you do not need to tip them. If the service is outstanding the biggest tip you can provide is positive word of mouth or the referral of a paying customer.
When it comes to service-related contractors that offer repeat services at your house such as cleaners, landscapers, meal preparers and paper deliverers, you may want to give them a bonus at the end of the year. But generally you do not pay a tip at time of service.
By all means, if the service provided by anyone is exemplary, use your judgment as to what reward is suitable. Sometimes the most effective gratuity extended can be a compliment.
A: Contractors who come to your house for a one time project such as carpet installation, window installation, hardwood flooring or appliance delivery, usually do not expect a tip. Some companies forbid their workers from accepting gratuity.
When contractors renovate or do minor electrical, plumbing or painting jobs you do not need to tip them. If the service is outstanding the biggest tip you can provide is positive word of mouth or the referral of a paying customer.
When it comes to service-related contractors that offer repeat services at your house such as cleaners, landscapers, meal preparers and paper deliverers, you may want to give them a bonus at the end of the year. But generally you do not pay a tip at time of service.
By all means, if the service provided by anyone is exemplary, use your judgment as to what reward is suitable. Sometimes the most effective gratuity extended can be a compliment.
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