A buyer scours the market for the right home and finally finds it. Then, all of a sudden, their winning offer situation turns into a loser. What happened? Here are a few of things that over more than 18 years of brokerage experience have taught me can put the kybosh on an advantageous offer situation and turn it into a loser.
#1 – The Buyers Left Their Offer on the Table Too Long
The longer an offer is on the table, the more time the listing agent has to use it as proof of the home’s desirability and encourage other buyers to make offers. As a result, the offer should force the seller to respond in as short a time period as is considered reasonable. How much time is reasonable for the seller to respond? It depends. At the first sign of my buyer’s interest in a home, I’m fond of asking the listing agent: “Is the seller easy to reach?” If the sellers are available, then I know I can tighten the time line. If the seller is in a remote area with little or no cell or internet, then of course the offer timeline has to be a little longer. If I want more specificity on the matter, I’ll ask the listing agent: “If my buyer makes an offer, how long is a reasonable time to expect a response from the seller?” Over eighteen years, my buyers have been able to scoop up homes from buyers who left their offer on the table for 24 hours or more.
(Click “continue reading,” to find out four more reasons why winning offer situations turn into losers)
Sometimes, I don’t hear my wife. It could be because my real estate channel is turned up so loud. My wife is the best thing that ever happened to me and I feel bad about waiting a little while to find out the errands I could be running, the chores I could be doing, and which one of my kids needs a talking to and why, but I think she knows that keeping it at maximum volume is the only way I can hear the changes in the market. Want to know what I heard most recently? Check out my featured column in Curbed this week!
“Ok,” I replied. “Why are you the greatest …”
“Timing,” he interrupted, laughing.
Like good comedy, successful real estate buying is often the result of excellent timing.
One of my first real estate transactions involved a hard-nosed investor and a first-time condo buyer. The investor had the connections to find a great deal, the ability to negotiate extremely advantageous terms, and the fearlessness to obtain an aggressive rent. But when the tenants wouldn’t re-up, he sold it to a first-time homebuyer, who of course knew little about real estate, but had the good fortune to purchase the condo just before the market went on a run that doubled its value. As for buying real estate, seriously, who needs market knowledge, financial discipline or negotiating ability, when you have timing on your side?
(This post first appeared as my column for June 2014 in Banker and Tradesman )
MLS market statistics show that a listing often needs some market time to find the right buyer…but they don’t need to age like fine wine before they’re ready to be bought. So when buyers notice that a home has sat on the market for a little while longer than they expected one of the most common questions they ask is, “Why has this home been on the market so long?” Put simply, more often than not, the reason is that the market has rejected the price. Poor locations and awkward layouts hurt a home’s marketability, as do clutter, flaws in the condition and a host of other imperfections. Yet regardless of how long a home has been on the market, the location it is situated or the condition it is in, if we halved the listing price buyers would start crawling out of the woodwork!
So when a house has been on the market a long time without finding a buyer, it’s almost always a pricing issue. It might not be necessary to halve the price, but a drop in the price would almost certainly introduce the home to new group of ready, willing and able buyers—many of whom probably didn’t even known the home was available. This new exposure often provokes its sale. If a seller is concerned about selling quickly and the price improvement doesn’t sell the home, the price might have to be continually cut until it does.
(Find out what happens to sellers who are more persistent about their price: Read more)
I remember one of the first offers I put in on behalf of a buyer. It was so low that the seller might have let out a few expletives when he got it. Of course, there was no counter offer and, insulted by that seller’s lack of response, my buyer didn’t move on to the next property. He moved on to the next agent.
This embarrassing situation and loss of future income helped me quickly learn an important part of my job: I have to communicate to my clients what is going to happen before it happens. Predicting the future in any endeavor is challenging, without a doubt, but in real estate where every potential transaction can be as unique as a snowflake, it looked impossible. The only thing that saved me in this noble pursuit was that I was young and committed.
(What happened next? Continue reading to find out.)
Continue reading »
Continue reading »
I can’t climb Everest or knock out Tyson, but I can consistently–without incident– park my car in Boston. So, give me some props. I ain’t perfect, I don’t have $300,000 deeded space, nor, being of sound mind and body will I spend half of what’s in my money clip for 30 minutes of parking. Yet, as an active agent I rise to Boston’s parking challenge almost every day and my thoughts on Meter Maids differ than ones found in the Urban Dictionary . Get some insights on this important topic: Check out my featured column in Curbed!
Perhaps the lack of inventory has contributed to fewer deals falling apart, but when Yogi Berra said, “It ain’t over til it’s over,” professional experiences have taught me that he might as well have been talking about residential real estate brokering. Sure, an offer was signed, a home inspection completed, a purchase and sale agreement executed, a commitment letter received and it may look like a deal, but I’m not going to spend that commission check yet. A lot can happen in the last 24 to 48 hours before a closing, and those events can rock the deal boat or even sink it. These last few hours are like the bottom of the ninth inning, so I know it pays to keep Mariano Rivera cool and do everything possible to keep good fortune on my side.
My column in Banker and Tradesman describes a dream I had of being personally responsible for managing the Spring condo market. Quite frankly, there is probably no greater responsibility in all of residential real estate. As I went through a checklist of the current market conditions, everything was looking great. That is, until I discovered someone had forgot to pick up the inventory. This column provides insights on supply and demand for April. Email me (BatesRealEstateReport@Gmail.com) for a copy of this light-hearted take on current market conditions.
My featured column in Curbed this week concerned the incredible increases in the median list price of “For Sale” condominiums in different Greater Boston locations. This past Tuesday, only the minority of active listings in Brookline were asking less than a $1 million. That same day the majority of active listings in the Back Bay were priced over $2 million. No wonder armies of buyers converge on reasonably priced Hub condos. Compared to a year ago, which Hub real estate hot spots have seen the median list price go up $250,000, $500,000, and $688,000? Check out my column and find out.
Photo by JAXA.
About David Bates
David Bates is a top producing real estate agent who has sold condominiums, single families, and investment property in a variety of Boston neighborhoods and many of the city's better suburbs.
His insights appear not only in in this original content blog, but also in the most established local media, including Banker and Tradesman, Boston Magazine, Boston.Curbed.com, The Boston Globe, The Boston Herald, Bloomberg News and NECN.
GET CONTEXT BEFORE YOU BUY OR SELL
Sign up and get my free ebook.
NOW AVAILABLE, Version 2.0 with many updates and additional information. This book is a great reference for buyers and sellers, who will quickly see how condos and neighborhoods compare. The short paragraphs and many visuals make it easy reading. CONTEXT 2.0 also includes many of my favorite posts, columns and articles.
More than 3,900 Likes/Recommends
My profile of Boston's most notorious landlord, "the man who made a fortune renting out the student ghetto" already has more than 3,900 likes/recommends.
- Back Bay
- Beacon Hill
- Boston Condo Inventory
- Boston Condo Prices
- Boston Income Property
- Boston MLS
- Boston Real Estate Investors
- Condo Fees
- Interesting Massachusetts Real Estate
- Jamaica Plain
- Luxury Real Estate
- Real Estate
- Real Estate Developers
- Real Estate Investors
- South Boston
- South End
- The Seaport