How can you buy Tarrant County real estate at the lowest possible price? You’ve been out house hunting for some time now. You’ve done all your due diligence and now it’s time to put in a written offer to purchase the home that is just right for you. How do you know much to offer the seller? Is it really how much your offer is or is it how you present your offer?
Determining the Market Price
Before writing your offer you need to determine what the market price is for the home you want to buy. Have your professional Tarrant County Realtor run a Comparable Market Analysis for you on similar homes that have sold recently in your target neighborhood. To arrive at a reasonable offer price you and your agent will be comparing the location, condition and amenities of similar homes that have already sold and the current competition of other homes for sale in the area.
Your Offer Price
Now you must figure out how much to write your offer for and also what is the most you are willing to pay for your Tarrant County home. If you are willing to pay market value or more for this home because you don’t want to risk losing it let your agent know that up front! Most good agents will do their best to negotiate a sales price that is below market for you because they want to make you happy and retain you as a future client. More importantly, they want and need your referrals. Only you can determine how you may feel if you lose this home to another buyer for only a few thousand dollars. If you want a good deal in Tarrant County real estate whether it be Arlington real estate, Southlake real estate or even Colleyville real estate make sure you tell your agent so, but if you must have this home in particular, tell your agent that too! His or her negotiating tactics will depend heavily on your desired outcome.
Tuesday, August 24, 2010
Monday, August 23, 2010
Some DFW REO Lenders Won't Sell Their Bank Repo to You
Many DFW homebuyers are chasing after bank repos and foreclosures and are discovering that some REO often referred to as REO’s (Real Estate Owned) lenders will not sell a bank repo home to them. These banks can name their own terms and conditions under which they will sell their bank owned homes, and if they don't fit those qualifications, they are out of luck. Don’t these banks want and need to get to get rid of these DFW foreclosure homes? Yes, but it isn’t so straight forward.
Banks Don't Want Buyers Submitting Multiple Offers
Banks have learned that not every DFW foreclosure buyer is fully committed to actually following through with the purchase of these homes. Some buyers make multiple offers with no intention, or ability, to buy all of them. They want to choose the best deal they can get, let the other ones go, and in doing so they could find themselves in court for writing these types of bogus offers. The problem arises when the buyer does not have the financial means to purchase more than one or all the properties they have contractually agreed to purchase. Many state laws might hold the buyer liable for breach of contract upon cancellation because the buyer may have breached an implied contract covenant of good faith. Banks want the buyer to be committed to the purchase and follow through on closing. If the bank has reason to believe the buyer is not serious or have the means, the bank will reject their offer to purchase. There are other reasons banks may not sell their bank repos to you.
Reasons a Bank Might Not Sell That Bank Repo to You
Some Bank-Owned Homes Do Not Qualify for Conventional Financing.
FHA Appraisal Conditions.
Banks Prefer Cash Buyers for Bank Repos.
Why REO Lenders Like All Cash Buyers to Purchase Bank Repos
No Appraisal Contingency.
No Loan Funding Contingency. Faster Closing.
As you can see these REO/Foreclosure Lenders are under no obligation to sell their REO properties or even these DFW foreclosures. With these types of transactions, it is imperative that you use a professional DFW Realtor to protect you and to ensure a smooth closing with your DFW real estate transactions. Trying to navigate through all of this yourself could cost you in the end.
Banks Don't Want Buyers Submitting Multiple Offers
Banks have learned that not every DFW foreclosure buyer is fully committed to actually following through with the purchase of these homes. Some buyers make multiple offers with no intention, or ability, to buy all of them. They want to choose the best deal they can get, let the other ones go, and in doing so they could find themselves in court for writing these types of bogus offers. The problem arises when the buyer does not have the financial means to purchase more than one or all the properties they have contractually agreed to purchase. Many state laws might hold the buyer liable for breach of contract upon cancellation because the buyer may have breached an implied contract covenant of good faith. Banks want the buyer to be committed to the purchase and follow through on closing. If the bank has reason to believe the buyer is not serious or have the means, the bank will reject their offer to purchase. There are other reasons banks may not sell their bank repos to you.
Reasons a Bank Might Not Sell That Bank Repo to You
Some Bank-Owned Homes Do Not Qualify for Conventional Financing.
FHA Appraisal Conditions.
Banks Prefer Cash Buyers for Bank Repos.
Why REO Lenders Like All Cash Buyers to Purchase Bank Repos
No Appraisal Contingency.
No Loan Funding Contingency. Faster Closing.
As you can see these REO/Foreclosure Lenders are under no obligation to sell their REO properties or even these DFW foreclosures. With these types of transactions, it is imperative that you use a professional DFW Realtor to protect you and to ensure a smooth closing with your DFW real estate transactions. Trying to navigate through all of this yourself could cost you in the end.
Earnest Money Deposits on DFW Bank-Owned Homes
The last thing a DFW home buyers wants to do is lose their earnest money deposit when buying a foreclosure or bank owned home. Bank owned home selling transactions, called REO’s (Real Estate Owned), are typically handled differently than most regular DFW real estate transactions. To make things even more interesting, there is very little conformity among these banks as to how each sale is handled. There is a common thread among these REO and foreclosure sales. It is a tightening of how earnest money deposits are handled for these types of REO/Foreclosure transactions.
Most regular real estate transactions in the DFW Metroplex are handled in a similar manner. A buyer makes the earnest money deposit check payable to escrow or title company. This deposit is refundable to the buyer pursuant to the terms and conditions of the sales contract. That is not to say, that the earnest money deposit is automatically returned to the buyer because a term or condition of the contract of sale has not been met. The escrow deposits cannot, in most cases, be released until a release is signed by both parties. Sometimes disputes arise, and that can delay the release of the escrow funds. Banks don't want to get halfway through the escrow process only to discover that the buyer wasn't serious about buying the home. Therefore, banks want to limit the cancellations and will make demands during the negotiation stages of the contract.
Here are tips for dealing with DFW REO lenders:
Make the Earnest Money Deposit Payable to Title Company.
Funds Must Be in the Buyer's Account to Cover the Check.
Prepare to Replace the Earnest Money Deposit with a Cashier's Check Upon Offer Acceptance.
Be Ready to Immediately Overnight the Earnest Money Deposit to the Bank's Designated Title or Escrow Company.
Negotiate Earnest Money Deposits Below the Maximum for Small Claims Court.
Time Your Negotiations for Non-Refundable Earnest Money Deposits.
Because some of these DFW REO banks will make your earnest money deposit non-refundable, especially on these DFW foreclosures, you may want to schedule your home inspection upon verbal acceptance of your offer. You may have less than 24 hours to get these important inspections completed. Line up your inspections ahead of time and be ready to go the minute your DFW Realtor tells you the offer will be accepted. This way, you will have your inspections completed before you deliver that earnest money deposit. It will save you a lot of grief and worry if you know that you definitely want to proceed with the transaction before handing over your money. You can find great home values with these types of DFW real estate transactions.
Who Pays The DFW Real Estate Commission
To understand who pays the DFW real estate commissions let's look at how real estate agents are paid and how and why they share their commissions with other cooperating agents. It can be a bit confusing so don't be embarrassed if you don't know how the commissions structures work.
How Real Estate Commissions Work
All real estate agents work under a real estate broker. All fees generated from a real estate transaction are paid to the broker and then the agent receives their portion of the commission through their broker. Only the real estate broker can collect a real estate commission.
How Do Real Estate Agents Get Compensated by the Broker?
The split agents receive vary from transaction to transaction. New agents can receive as little as 30% to 40% of the total commission received by the broker. A more seasoned agent can receive form 50-70% of the total commission. From that amount, other fees may be deducted such as advertising, sign rentals or office expenses. Top producing agents might receive 100% and pay the broke a flat desk fee.
Listing Agents' Fees
The most typical type of listing agreement between a seller and an agent gives that agent's broker the right to exclusively market the property. In return for finding a willing and able buyer, the seller agrees to pay a commission to the broker. Typically, this fee is represented as a percentage of the sales price and is shared between the listing broker and the selling broker.
Co-Broker Splits
The split of commissions between brokers is not always fair or equal. For example, a seller could sign a listing agreement for 6% that states that the listing broker will receive 4% and will pay 2% to the selling broker. It is not always a 50/50 arrangement. In a buyer's market, a seller may want to ask the broker to give a larger percent of the commission to the buyer's broker. On the other hand, in a seller's market, the buyer's broker might receive less. There is no standard arrangement.
Buyer's Brokers
Seller Pays the Buyer's Commission
Under a Buyer's Broker agreement the named broker and agent represent the buyer's interest. The commission paid to the broker is usually paid by the seller. Some buyer broker agreements will contain a clause that will compensate the broker for their commission due less the amount paid by the seller. For an example, a cooperating listing agreement may offer to pay a broker only 2% of the sales price, whereas the brokerage generally charges a commission of 3%. The difference of could be paid by the buyer if the broker chooses not to waive that amount or the commission.
Buyer Pays the Commission
The seller is then not obligated, under most listing agreements, to pay the listing broker for more than the listing side of the commission. Many time sales prices will be reduced to reflect the amount the buyer is actually paying. Sellers can also give a credit to the buyer for the commission and the buyer will then credit the broker.
Who Really Pays the Commission?
It can be argued that the buyer pays the commission. Why? Because it is generally included in the sales price. If the seller did not sign an agreement to pay a commission to a DFW Realtor, the sales price may have been lower. On the other side of that thinking, it be argued that the seller pays the commission from the sale of DFW Real Estate because it is deduced from the sellers money at closing. The reality of it is that both the buyer and seller are paying the commission. The only way to avoid a commission is to sell your home as a Dallas FSBO (For Sale By Owner). There is much undue risk in buying or selling a home in this manner. It is always better to retain the services of a professional DFW Realtor.
Can a Tree help you sell your Plano Home?
Can a Tree help you sell your Plano home? Believe it or not, yes. The American Nursery & Landscape Association says that improved landscape quality and tree coverage has a positive impact on the price of single-family homes. They say that approximately 30 percent of the increase in sale value was accounted for by added tree coverage. They go on to say that for each $1.00 invested in upgrading an average landscape returns $1.35 in added property value. While most homeowners know that landscape is a big draw for buyers, they usually don't know how much and what kinds of landscaping that have the biggest positive impact their property value.
General tree cover adds between 2 percent and 9% to the value of existing homes and 7% for new homes. Just a single good size tree can add up to 2% to the home's value. Hedges, dense vegetation, retaining walls and landscaped curbs can each add 2 to 4% percent to the value of a home. If your home has more trees than the nearby homes, the value rises by approximately 7%. The perceived value of a home may increase by 5 to 11% with sophisticated landscaping which incorporates large plants, evergreens, annual color, deciduous plants and colored hardscapes. Improvement in landscaping from average quality to excellent quality increases the value of a home by 10.8%, with approximately 30 percent of the increase in value appropriated to the addition of trees.
There are additional actual and perceived benefits to upgraded landscaping. Improved landscaping provides a positive and relaxing quality for the homeowner and the people in the community. Upgraded landscaping can help with lower utility costs. Tree cover is important to because they provide shade from the summer sun and shelter from the cold winter wind, reducing heating and cooling costs. It is clear that the Plano real estate owner can benefit in a multitude of ways by improving, upgrading and adding to their existing landscaping. You can purchase a Plano foreclosure home and make it more valuable just working with the landscaping alone. Talk with a professional Plano Realtor to find out what types of landscape upgrades are best in your area.
Buying a DFW Home? Consider Resale Value
Homes with a nice view, like a gold course, cityscape, water view, often sell at a premium above similar homes without a view. If a view is important to you be prepared to pay the price for it. You will need to place a considerable dollar value on the view. When it comes time to sell the home you will likely recover the “view premium”. If you are buying a home with a view be careful not to over pay otherwise you might not get all of your investment back when you sell.
Most real estate value is due to its location but the building and the lot are important to. Generally, it should be as level and as open as possible. Assuming the property is in a typical neighborhood, the lot should be rectangular. Try to avoid odd shaped lots or oddly situated lots. Yard sizes are smaller in more modern homes than with the older counter parts, but there should still be a decently sized yard, especially in the rear of the house. You will get your best value if the house is moderately landscaped for the area. You can always jazz up the landscaping during your ownership but don’t over improve and spend too much.
In each community the houses will vary in size and amount of rooms, but they should not too much. If resale value is an important consideration of home ownership, you should not buy the largest house in the community. When determining your market value, the homes that are nearest to yours have the most importance. If many of the houses in your community are smaller than your house, this can lower the appreciation of your house. On the other hand, if you buy a small or medium house for the community, the larger homes can help raise the appreciation of your house.
Three and four bedroom houses are by far the most popular among home buyers. There should always be a minimum of at least two bathrooms in a house, preferably two and a half. Walk-in closets are extremely desirable in any master bedroom. For the rest of the house, be sure there is plenty of closet and storage space.
Garages add to the resale value and you should always make sure to get at least a two-car garage. More and more three car garages have become desirable in many areas. The laundry facilities should be located somewhere convenient on the main floor of the house. These days some homeowners prefer to have the laundry facilities located near the bedrooms no matter what floor they are located on.
Families seem to congregate activity around the kitchen making this the most important room of the house. Larger kitchens are better, and they should have updated modern appliances. The dining room and breakfast area should be located adjacent to the kitchen. It is best if the family room is viewable from the kitchen. A fireplace in the living room may be nice, but you pay extra for it and will probably rarely use it and it does not usually add much in real value.
Swimming pools do not provide as much added value unless you are located in an area where most people have one. Having a pool in a cooler climate area may actually reduce your number of potential homebuyers when you try to resell the home. With DFW property listings you will find about 40% of the houses have pools. Only buy a home with a pool for your own enjoyment, not as an investment.
Pay special attention to determining your "wants" versus your "needs" because it is extremely important. Buying what you need in a more prestigious neighborhood may prove to be more financial rewarding than getting what you want in a less desirable neighborhood. You don’t want to over extend yourself and have your house turn out to be another Dallas foreclosure home. It is always best to get advice from a professional Realtor. If you decided to purchases a Dallas FSBO home, be prepared to make many of the mistakes most rooky home buyers make.
Most real estate value is due to its location but the building and the lot are important to. Generally, it should be as level and as open as possible. Assuming the property is in a typical neighborhood, the lot should be rectangular. Try to avoid odd shaped lots or oddly situated lots. Yard sizes are smaller in more modern homes than with the older counter parts, but there should still be a decently sized yard, especially in the rear of the house. You will get your best value if the house is moderately landscaped for the area. You can always jazz up the landscaping during your ownership but don’t over improve and spend too much.
In each community the houses will vary in size and amount of rooms, but they should not too much. If resale value is an important consideration of home ownership, you should not buy the largest house in the community. When determining your market value, the homes that are nearest to yours have the most importance. If many of the houses in your community are smaller than your house, this can lower the appreciation of your house. On the other hand, if you buy a small or medium house for the community, the larger homes can help raise the appreciation of your house.
Three and four bedroom houses are by far the most popular among home buyers. There should always be a minimum of at least two bathrooms in a house, preferably two and a half. Walk-in closets are extremely desirable in any master bedroom. For the rest of the house, be sure there is plenty of closet and storage space.
Garages add to the resale value and you should always make sure to get at least a two-car garage. More and more three car garages have become desirable in many areas. The laundry facilities should be located somewhere convenient on the main floor of the house. These days some homeowners prefer to have the laundry facilities located near the bedrooms no matter what floor they are located on.
Families seem to congregate activity around the kitchen making this the most important room of the house. Larger kitchens are better, and they should have updated modern appliances. The dining room and breakfast area should be located adjacent to the kitchen. It is best if the family room is viewable from the kitchen. A fireplace in the living room may be nice, but you pay extra for it and will probably rarely use it and it does not usually add much in real value.
Swimming pools do not provide as much added value unless you are located in an area where most people have one. Having a pool in a cooler climate area may actually reduce your number of potential homebuyers when you try to resell the home. With DFW property listings you will find about 40% of the houses have pools. Only buy a home with a pool for your own enjoyment, not as an investment.
Pay special attention to determining your "wants" versus your "needs" because it is extremely important. Buying what you need in a more prestigious neighborhood may prove to be more financial rewarding than getting what you want in a less desirable neighborhood. You don’t want to over extend yourself and have your house turn out to be another Dallas foreclosure home. It is always best to get advice from a professional Realtor. If you decided to purchases a Dallas FSBO home, be prepared to make many of the mistakes most rooky home buyers make.
Friday, August 20, 2010
Making a Lowball Offer on a DFW Home
Many potential DFW homebuyers thing a good strategy for making their home offer is to make a lowball offer thinking and assuming that they make get lucky and get their offer accepted. They figure the worst case is that the seller will counter their lowball offer, maybe half way, and they will still save a ton of money. This is possible but the chances are slim to none, closer to none. Many times a seller will be offend by the lowball offer and simply reject it. Even if that buyer submits a higher offer, the seller won’t even look at it.
Here are 5 common lowball offer mistakes buyers and their agents routinely make:
Submitting a Lowball Offer Before Calling the Listing Agent First
The listing agent can, in most instances, provide valuable information about the seller and their circumstances that will help you to write the offer in such a manner that the seller will be likely to accept. If your DFW Realtor doesn't call the listing agent first, for all you know, that home might already have a contract pending on it. Also, always call to find out how many offers the agent has received, if any.
Submitting a Lowball Offer With a Low Earnest Deposit
Earnest money deposits generally vary anywhere from 1% to 5% of the sales price. If a buyer submits an offer way below list price and then sends a small earnest money deposit it makes the buyer appears as though they are not serious or committed to buying the property.
Submitting a Lowball Offer With A Letter of their Situation
Most sellers don't want to read a hardship letter from a buyer and don't usually care if a buyer has fallen in love with their home that they can’t afford. Banks are even less forgiving in these types of situations. Explaining to a seller that the buyer doesn't qualify to pay list price sends a signal that the buyer shouldn’t be making an offer on other home in the first place. It makes the buyer appear financially weak and uninformed.
Submitting a Lowball Offer With Non Accurate Comparable Sales
Unless the home is substantially overpriced, the listing agent has already given the seller a comparative market analysis to support the sales price before putting the home on the market. Sending the listing agent a list of sales from another area insults the agent's intelligence and put them on guard that you are unethical. This also shows that the buyer's agent does not know the values in the neighborhood or the surrounding properties The best way to handle this to get your professional DFW Realtor to run recent comparable using the local DFW MLS that could possibly show that prices have in that area. If your Realtor can find a few DFW listings will much lower prices this could help support your lowball offer.
Submitting a Lowball Offer Asking For Concessions
If it's not bad enough to anger the seller with a lowball offer but it makes the situation even worse if the buyer also ask for concessions like help with closing cost on top of an already low offer price. Some sellers are willing to give a cash credit to buyers, but generally they will refuse to do so on a lowball offer. There are better ways to get a low-ball offer accepted than with making these 5 mistakes.
Subscribe to:
Posts (Atom)