The Most Frequently Asked Offer Questions

The home buying offer process – whether it be in Weston, MA or Timbukto – brings with it a multitude of questions. I’d like to say some questions are simple and others are complex, but truthfully, they are almost all complex. There are so many variables and potential scenarios that can happen when making an offer, and there isn’t anyone who can forecast what will happen and what the cause and effect will be – unless there are any crystal ball readers out there 😉. After reflecting on this high degree of uncertainty and complexity that defines the home buying process. I’ve come to realize two things. First, acting – instead of not acting or waiting – is almost* always best when trying to buy a house. It puts you in control of your destiny – at least as much as is possible during this process. And second, you can only control what you do – not what the seller does and not what other buyers do. If you go back to these two principles during the home buying process, the right answer for you should quickly follow (fingers crossed)….

And now down to the nitty gritty of the most frequently asked offer questions:

Specific offer questions (about the details of the offer):

1. How high should my initial offering price be? As strong as you can make it. The stronger the price, the better. For example, if you’re making an offer on a house that is priced at $1,275,000 that’s been on the market for 10 days, and you’re deciding whether your initial bid should be $1,175,000 or $1,200,000, go for the latter. And then you can go up more slowly from that initial, slightly higher number. A higher-priced initial offer will always be better received by the seller, and it will set a more positive tone for the rest of the negotiation. That being said, you don’t want to overpay for the house, and so you’ll want to thoroughly evaluate the comps (sold properties that are comparable to the property).

2. What is the optimal offer deadline? It depends. You want to give the seller time to respond, and you don’t want to make the deadline unreasonable. BUT  you also want to make it tight enough so that other buyers have less time to get their acts together and put in competitive offers. So if you think there will be a multiple bid situation, make the offer deadline tight – 5’ish hours. But if you don’t think it will be tight, 12 hours (give or take) is more reasonable. And I never tend to go any longer than 24 hours – except in very special situations, like an estate when multiple family members and attorneys are involved. Also keep in mind the sleep factor when determining your offer deadline strategy. Negotiations tend to cease at bedtime (10’ish p.m.) and then start back up the next morning (8:30/9 a.m.).

3. Does putting down more money at the P&S entice the seller to take my offer? It depends. The truth is that the Purchase and Sale Agreement (P&S) money is held by the listing firm or the seller’s attorney until the closing so the seller doesn’t have access to the funds. That being said, the increased downpayment can give the seller more peace of mind that the deal will stay together. Putting down 10% of the purchase price at the P&S means that you have “more skin in the game,” and it’s much harder to walk away from the purchase and your 10%. Just for your reference, more times than not in our neck of the woods, buyers put down 5% – and not 10% – of the purchase price at the P&S .

4. Does asking for additional inclusions weaken my offer? It depends. If you’ve made a full-price offer, the seller probably won’t be upset if you also ask for a few window treatments and lighting fixtures to be included instead of excluded. But if that’s not the case, and you make a long list of items you would like to be included when the offer has a sub-par price, it definitely will weaken the offer plus it risks upsetting the seller. 😡

5. How much more attractive is my offer without a mortgage contingency? In one word – VERY! This means that the seller has basically sold his house as soon as the inspection has been negotiated and the P&S has been signed – a time frame of about two weeks.

General offer questions (about the offer process):

1. Should I put in my offer prior to the open house? – My blog post, Making an Offer Before or After the Open House, goes into this question in extensive detail, but if you’re looking for the Cliff Notes, the answer is to act as soon as possible. That old adage, “Nothing ventured, nothing gained!” is in full force here. In the best case scenario, you would put in your extremely strong offer and have it accepted prior to the open house. Buyer beware –  this approach won’t likely play out this way if your offer is not strong….

2. Should I put in my offer or wait to see if other offers come in? Assuming you would be making a strong, competitive offer, the answer to this question is always to put in the offer ASAP. It’s that old adage again, “Nothing ventured, nothing gained!” In this scenario, it’s 100% true. While making an offer puts you on the pathway to buying the house, waiting does not. You can’t purchase the house, if you don’t try. And more and more these days, I see listing agents “taking offers as they come” rather than setting an offer deadline.  The next question that follows is, “Will my offer stimulate others to make offers?” And the answer to that question is unknown – maybe yes or maybe no. More importantly, though, it’s completely out of your control. The only part of the offer process that you can control is what you do – and not what others do. And so if you want the house, go for it!

3. What should I do if this home is higher than my preferred price range? There are two ways to proceed in this situation:

   • ACT – Make the most compelling offer that you can and see how the seller responds….. Although extremely unlikely, there is a slight chance that the offer might appeal to the seller in some way and he might decide to accept it. Remember that same old adage I keep mentioning – “Nothing ventured, nothing gained.”

                                              OR

1. WAIT – I generally advocate acting over waiting, but in this case, time is your friend and waiting* could very well be the better path to follow. The more time that passes, the more negotiable the seller will become on price. But you run the risk of losing the property to another buyer who can readily afford the house. This is a tough one….

What are your thoughts on the subject? Have you had these or similar questions when you were buying a home? If so, how did you decide to proceed? And were you successful at purchasing the house? I can’t wait to hear….

For more information on this or about the real estate market in Weston, Wellesley, Wayland and the surrounding towns or if you are considering selling your home, please contact me, Lisa Curlett (www.lisacurlett.com, 781-267-2844 or lisa.curlett@compass.com), to answer any questions or for a complimentary home appraisal.

* One of the times in which it very well could behoove you to wait rather than to act is when you can’t quite afford the property.   

Home-Buying Tips to Beat the Spring Market

You’re a home buyer looking in the towns of Weston, Wellesley and Wayland, MA, and it’s April 2018, a.k.a. the height of the Spring market. You’re looking for a house in the $1M range, and you’re facing hundreds of competitive buyers, many of whom are making offers that are without mortgage commitments and that are significantly above and beyond the asking price. In fact, some of these buyers are even waiving their inspection contingencies. Yikes! How do you even begin to compete in this kind of environment?

It’s tough, but don’t despair. Here are some strategies you can ponder and potentially use to help you compete in – and possibly even beat – the competitiveness of the Spring home-buying market:

1. Target homes that need some work. Most buyers today want a home that’s “move right in.” Their lives are too busy and complicated, and so they want something that’s easy. Therefore these turnkey homes are in high demand, and people go crazy over them. And by “go crazy,” I mean overpay, drop their mortgage contingencies and sometimes even waive their inspection contingencies. Everybody wants these houses. The demand is out of control. And so by targeting a home that needs some work, you will have less competition and your chances of not having to go out of your comfort zone to buy the house goes up significantly.

2. Focus on homes that have accrued days on the market. This phenomenon usually goes hand in hand with tip #1 in that the homes that need some work often have accrued days on the market. But sometimes there are nice homes that simply sit on the market. Perhaps the house is overpriced, and there haven’t been any price reductions, and so the market has dismissed it. Or the market has overlooked the home for some reason that leaves agents scratching their heads. Whatever the reason, a home with accrued days on the market translates to a buyer getting a better deal without the crazy Spring market competition.

3. Postpone your search slightly until the late Spring/early Summer. As we approach the end of May and enter into the summer months, home buyer demand wanes somewhat, but the inventory is often higher and so the intensity around bidding on and buying a house lessens. The same is true for the holiday season – late November into December. A small caveat, however…. If a “move right in” property in a great location at a competitive price comes on the market at any time of the year, it still will likely bring on a bevy of competitive offers.

4. Downgrade your price point. This is another option though truly I’ve never had a buyer opt to do this. Once you see what you can get at a higher price point, it’s hard to downgrade. That being said, the theory behind this is that if you can actually afford much more than what you are offering for a house, then you have the freedom and opportunity to make an incredibly competitive and strong offer.

What are your thoughts on this subject? Have you encountered a similar competitive home buying scenario? If so, did you use some of the tactics above to help combat the situation? Or were there other strategies you used? I can’t wait to hear….

For more information on this or about the real estate market in Weston, Wellesley, Wayland and the surrounding towns or if you are considering selling your home, please contact me, Lisa Curlett (www.lisacurlett.com, 781-267-2844 or lisa.curlett@compass.com), to answer any questions or for a complimentary home appraisal.

When is the Best Time to Buy a House?

When is the best time to buy a house? This is a question I am asked with quite a bit of frequency. And the answer really depends on what you’re looking to achieve. Are you looking for the best price? Are you looking for the most inventory from which to choose? Or are you looking for a house that you just can’t live without – your dream house?

Here are some general* guidelines about the pros and cons of home buying at various times of the year:

The Spring Market (generally runs from January/February through late May) – If you’re looking for the most inventory from which to choose, this is it. In our neck of the woods (Weston, Wellesley, Wayland and the like), the Spring Market is our strongest, busiest time of the year. The most homes are on the market, the most buyers are looking and the homes are at their highest prices. The upside is that you have more homes from which to choose, the downside is that you are competing with more buyers for homes and you are likely going to pay more. But sometimes you have no control over the timing. If you are relocating to the area or moving from the city, you need to buy a home in time for the start of the new school year in September. This often mandates buying in the Spring Market.

The Summer Months (June, July and August) – The Summer Months can be interesting, and it’s hard to predict how they will be. Often if there’s been a late start to the Spring Market, the Summer Months can be quite active. But generally, it does slow down as people go on vacation, spend time relaxing and set their sights on things other than the real estate market. The good news about this? There is not as much competition from other buyers and prices can be a bit softer. The bad news is that there is usually a slow down of homes coming on the market so there is not as much inventory from which to choose.

The Fall Market (September through mid-late November) – The saying goes like this, “It’s better to sell in the Spring (think higher prices) and buy in the Fall (think lower prices).” That being said, the Fall Market is the second strongest market we have – after the Spring Market. So the good news is that there will be more homes from which to choose and there will be less buyers with which to compete. The buyers of the Fall Market tend to be local buyers; those relocating have generally purchased their homes already. The downside is that prices are higher in the fall than during the Summer Months and the Holidays/Winter – though still not as high as they are in the spring. The Fall Market is the last hoorah – the last formal market of the year – and sellers often raise their home prices accordingly.

The Holidays/Winter (mid-late November through the beginning of the New Year) – If you’re looking for a better price, this is probably the best time for you to buy. Plus you won’t be facing much competition from other buyers. But the downside to this time of the year is that the inventory is typically at its lowest so there is not a huge roster of homes from which to choose. Sellers generally take their homes off the market during this time when the market is slower and people are more focused on preparing for and celebrating the holidays than on buying homes.

On a final note, if you have fallen in love with a house, the strategies above go out the window. Your dream house is available now (whenever that time might happen to be), and if you want it, you need to act. Furthermore, for those of you relocating to the area, you don’t have much control over when to buy either. You need to buy in time to have closed on a home by July or August so that you can register the kids for school and get settled into your new home and community. This usually means one thing – buying in the Spring Market.

What are your thoughts? What time of the year did you buy your last house? And was the time in which you purchased your home something about which you strategized and over which you had control or not? I can’t wait to hear….

For more information on this or about the real estate market in Weston, Wellesley, Wayland and the surrounding towns or if you are considering selling your home, please contact me, Lisa Curlett (www.lisacurlett.com, 781-267-2844 or lisa.curlett@compass.com), to answer any questions or for a complimentary home appraisal.

* These are general guidelines, and there are always exceptions to the rules and norms.

Buying a Home in a Multiple Bid Situation

As many of you know and have likely experienced, the multiple bid situation is happening more and more these days. Especially with homes priced under $1 million in such towns as Weston, Wellesley, Wayland and Needham, multiple bids have become more of the norm than not. Given this current state of affairs, I wanted to share a few quick tips to help with the process when you are buying a home and either anticipate being in a multiple bid situation or find yourself in one:

• Visit the property more than once – sometimes this isn’t possible if the property comes on the market, and there are five offers on it that same day. But if you have the luxury of going back to see the home a second time, make sure you do. You often see new things or view things differently on a subsequent visit. A second showing may ultimately make or break your decision to put in an offer.

• Find out what’s most important to the seller – usually it’s price, but often closing date, your plans for the house (i.e., tearing it down or renovating it) or other such matters can be equally as important. It’s crucial to know this information before you write up the offer.

• Put your best foot forward – you may not get a second chance so make the offer the strongest you can muster. That being said, the inspection contingency (unless you are knocking down the house) is something you always want to include. If you feel comfortable financially and can eliminate the mortgage contingency, this can significantly strengthen your offer in the eyes of the seller. But this is something you have to consider very seriously because if you don’t have a mortgage contingency and don’t get financing, you will be losing your 5% deposit, which can often be sizable. If you’re not comfortable with taking out the mortgage contingency, the other option – if feasible – is to put down more money and reduce the amount you are borrowing. This can also serve to lessen the seller’s anxiety about the mortgage commitment process.

• Picking your “best and final” number – make sure the final price you give is really your best and final. This way if you find out that buyer party #2 got the house for just $1,000 more than your bid, you won’t be devastated because you weren’t willing to pay any more than your best and final number. It helps if you think about this final price in those terms.

• Show your commitment to the home purchase – put down more money as a deposit. It is standard where we live to put down 5% at the P&S (purchase and sale agreement). Often in a multiple bid situation, however, you will see buyers increase that amount to 10%. And though it’s just a gesture, because the money doesn’t even touch the seller’s hands until the closing, it does show your deep commitment to buy the house.

• Get your offer in on time and have all of the pertinent paperwork attached – if there is a deadline for offers, and you are late in getting in your paperwork, you could be doing yourself a disservice. The paperwork at this point in the process usually includes the offer, contingency addendum form, agency disclosure, pre-approval letter, copy of the offer check and completed lead paint form.

• Keep your fingers crossed and a smile on your face – if you tried your very best, and you did not end up “winning” the house, don’t despair. Either the deal will fall apart and you will have a second chance at the house. Or more realistically, you will find another home that is likely better suited for you. I know it sounds cliche, but “what’s meant to be, will be” – and 9 times out of 10, this is true and a good thing too.

Another factor to keep in mind is that you might want to communicate some personal background about yourself. This really depends on the scenario, and it is completely up to you and your comfort level, but sometimes adding some personal information can help the seller identify with you. On the other hand, sharing personal information can also work in reverse. But it’s something to keep in the back of your mind and weigh the pros and cons in each particular situation.

What are your thoughts on this subject? Have you ever been in a multiple bid situation(s)? If so, how did you fare? Are there other tips you would add to help with the process? I can’t wait to hear….

For more information on this or about the real estate market in Weston, Wellesley, Wayland and the surrounding towns or if you are considering selling your home, please contact me, Lisa Curlett (www.lisacurlett.com, 781-267-2844 or lisa.curlett@compass.com), to answer any questions or for a complimentary home appraisal.