Episode #23: Spotting A Good Offer
The Savvy Synopsis
Last week, we shared how to make a good offer. This week, let's flip the script and examine the equation from a seller's perspective. Join us as we learn how to spot a good offer.
Spotting A Good Offer.
- 00:38 - Spotting a good offer is an art. As a seller, you want to make sure you're getting the most bang for your buck, and you want to find the right buyer for your home.
- 3:12 - Just because you've received an offer on your home doesn't mean that's the maximum amount the buyer who made that offer is willing to pay. You'll typically have the opportunity to counter the buyer's offer, and many times, they'll be willing to pay more.
- 5:31 - Conflict is a natural part of the negotiation process. Don't let your emotions get in the way of selling your home.
- 8:53 - Don't leave your buyer room to escape. If you have a long due diligence period and closing date, you're more likely to lose the sale.
- 11:02 - Don't overlook the fine print. Conditions and contingencies are important. If you want to take your fixtures with you, you need to write them on the contract. Otherwise, you'll be required to leave your belongings behind.
- 16:08 - Zoey wants to buy right now, but she's worried about the low inventory during the Holiday Season. She's wondering whether she should press pause until the spring.
The Closing Recap.
- 13:21 - We share a success story celebrating Derek and Erica.
- The two moved from New Jersey and rented an Airbnb in hopes of finding a new home. They were basically starting over, and we connected to help them find the right home. They ended up buying a house in Flowers Plantation in Clayton.
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It's time for The Savvy Realtor Podcast. I'm Walter Storholt alongside Angie Cole the owner and broker in charge of A Cole Realty serving you throughout the Triangle teaching you about the ins and outs when it comes to buying or selling a home. You can find the team online by going to A Cole Realty Dot Com. That's A Cole Realty Dot Com or by calling 9 1 9 5 7 8 3 1 2 8 that's 9 1 9 5 7 8 3 1 2 8 and now it's time for one of the top realtors in the Triangle. Angie Cole and The Savvy Realtor podcast one of the ways that you've been successful Angie is helping your sellers spot good buyers and good offers. And
We're gonna break down this conversation in a few moments but I don't think a lot of people you know realize that there's kind of an art to this side of the process. I think a lot of people think oh you got an offer you just accept it or you deny it and move on. But there's a lot of other things that make up a good or a bad offer when you're trying to evaluate these things right.
Oh yeah most definitely. You know starting off with calculating net proceeds. That's number one and that actually starts from the time that you meet with your listing specialist. So whenever you decide to interview agents and decide on an agent to represent you they should be providing you with a net proceeds sheet because it's great if they tell you that hey you can sell your home for 250. But what does the bottom net really look like. You know there's a lot of expenses that are required in North Carolina for all sellers to pay the sellers aren't aware of for example tax revenue stamps you know which is point zero two percent of the purchase price. A lot of sellers are not aware that that's a required fee you know and that adds up maybe they're pro-rated taxes. Maybe there's a a joke transfer fee that the HSA charges said truly understanding the net. But when we're talking about you know an offer we should then take that net proceeds sheet and we should plug in our numbers of our offer because for example say we have a two hundred fifty thousand dollar offer price but this one offer maybe up to offers one offer is offering you two hundred and fifty thousand the next offer is offering you two hundred fifty thousand as well but they also are asking for you to pay five thousand of their closing costs. Well the true net to you as a seller would then be you know the 245. And so a lot of times it can be deceiving you know because you might even see an offer for 251 you might be like oh this is exciting. Well if they're asked for 5000 a closing costs really really needed than the 246. So make sure you're truly understanding the net proceeds and what the bottom line will be for you as a seller when it comes to accepting a good offer.
That's a great point. So yeah let that be kind of the very first thing you're thinking about is make sure you're evaluating everything on that equal playing field and that net proceeds sheet is certainly unimportant. It's seems like an industry term but it's an important one to know if you're going to be selling your home. That's one that's worth your due diligence to use another industry term in a different way though. Yeah. You know do your due diligence on the seller side to make sure that you know all the numbers that are being factored into the equation there and then also I guess the next thing Angie is to realize that you know just because you've received an offer on your home doesn't mean that that's the max that the person who made the offer is willing to pay.
Not at all. And I can't tell these specific numbers as far as where this one particular home will close out because I hasn't closed out yet and that's like illegal for me to deal. But there was a situation where when my buying agents made an offer on a home here in the Raleigh area and they made an initial offer which was actually kind of a low low offer the comparables actually supported a higher price point. Now it was over listed in the first place as far as the price but the offer that was made was super super low. The seller came back and they just accepted the offer and you know it was funny because I was speaking with my buyer specialist and she was almost she just felt bad for the poor sellers. She was like they were not being represented how they should be because they just left so much money on the table because when we made our initial offer we knew the seller was going to counter right and they didn't even try. They just accepted and ran with it. And I mean she just. Of course our buyers are super excited but she almost felt bad for the poor sellers that didn't have an agent looking out for them to say hey we should counter. So just remember whenever an initial offer is made to you when you are the seller almost always you can counter something unless they just come to you and say this is the best we're willing to do which even in that case I've still we've had times when we said you know what I understand that this is the best that you're willing to deal but if you can just increase this or change this to it you know whatever it might be will accept it. And as so many times the buyer say OK well we'll do that you know so don't be scared to counter an offer and even counter more than once in order to get top dollar for your home or the best scenario for your home too because timeline is important as well.
Absolutely it is. And I think that's just a really key one. Remember this that there's there's a lot of options out there and that there can be some back and forth. It's OK you're not going to hurt anybody's feelings and if if you do well that's OK. That's a lot of this a business transaction. So consider the counter offer don't leave that money on the table. Big mistake that a lot of folks who don't have that representation often fall into say Angie I guess sometimes there's conflict. Right. I mean you've got to kind of be prepared for that but a lot of people don't operate very well when there's a little bit of conflict you know in negotiations and that sort of thing.
Yeah for sure you know be careful to not allow your emotions to get in the way. I've seen so often that that can just kill a deal. You know it's sad to say but the easiest sellers to work with are builders and you know why. Because they have absolutely no emotion involved with selling the homes. It just comes down to. All right. Do the numbers make sense. You know but I love love love work with clients where you know this is a home that they built memories you know in the home you know sit this home means so much to them and we're just helping them to make the next transition in their life whatever that might be you know but be careful not to allow your emotions to get in the way of negotiating because it really can blow up a deal. You know I've seen some sellers where they just are standing firm because in their mind their homes are worth way more money than what the home truly should be worth. You know what. And if your goal is to sell your home you really need to take the advice of your agent you know and don't allow emotions to just dictate you know how you're responding to offers.
Great point as well. Angie all right. So we're talking about these different ways you can spot a good offer it goes even deeper than this because sometimes Angie the highest offer isn't always the best.
That is so so true. You know you remember an offer has a lot of different details. You know we have an offer price. The sales price we have due diligence money. There could be earnest money additional earnest money. There could be a due diligence and date a closing date. Maybe there's personal property that they've asked of you maybe they've asked you for closing costs to be paid they've asked for a warranty. You know maybe there's a contingency. Also you need to look at financing as well. You know maybe you have a cash offer that's lower than a financed offer but the cash offer is a quick close. You know and you feel confident that you know it's going to make it to the closing table so maybe you just accept a lower offer. So make sure that you're looking at the offer in its entirety. You know in its hole to make sure that that particular offer is most attractive. The biggest hiccups I've seen recently and even in the past has been you know accepting the top off or maybe there's multiple offers and the loan terms. So for example we had a situation where the home has now closed. We went with the best offer in regards to loan terms. And the reason being it was a conventional loan where the other ones were FHA loans. And we thought we would have as many issues with appraisal and the home being sold as is because of its condition. Well we were under contract not some the buyer's loan terms changed on us. They too then had to go an FHA route and there were so many hiccups along the way. Not to say that an FHA buyer is bad but you know there's so much more that goes in and that is involved in an offer other than just the sales price and the highest price. You know you want to make sure that all the terms work towards your advantage.
Absolutely. And that's a really important one to remember as well. Now Angie I think this next tip that we're going to give may come off in the wrong way and we don't mean it to be that I know you'll put it more eloquently than I do but the next tip for spotting and accepting a good offer if you're a seller is to don't leave your buyer room to escape. That sounds like can I. What do we mean by that.
Yeah. You know to me the where you could allow your buyer to escape is by having a very long due diligence and closing date you know because once you officially go under contract you have an executed contract immediately the buyer's due diligence money is at risk. You know that's something that's negotiated as well. But typically that amount is going to be less vs. the earnest money. So due diligence money is at risk immediately should the buyer back out any time during due diligence period. They would only lose that do a due diligence money which you would then keep. Of course they have other expenses personally they would be paying for. But the only moneys you would keep would be their due diligence money. Well once we get past due diligence date the end of due diligence date then their earnest money or additional earnest moneys at rest. You have a lot more like skin in the game should they decide to back out. So by having a very lengthy due diligence period can hurt you as a seller that is allowing time your buyer to escape you now.
That's just given them the chance to overthink things. You know do even more research is dig deep into the home and drag things on and they might start looking at other homes they might have a change of heart. So my one big piece or word of advice there is keep that due diligence time frame short not too short because buyers need the time do their investigations and get their appraisal and get their loan. But keep that timeline shorter than normal. And then also be careful about next then the closing date as well. You know the norm for closing dates or anywhere from like 25 to 45 days. And that's because it's a buyer's obtain and financing. That's the time required for the loan to close. You know but I've seen other situations where hey let's do a 90 day or 120 day closing because it works for both parties and it might. But remember you haven't truly sold your home and you go to the closing table until is recorded. So just be cautious of allowing a very long closing date to last but not least.
Angie in this conversation about spotting and accepting a good offer and this is paperwork this is attention to detail kind of stuff here. This is where a lot of for sale by owners I think go wrong because they overlook some of these smaller details and get themselves in a bit of trouble from time to time conditions and contingencies.
What I've seen the biggest issue that I've seen sellers run into as far as like the fine lines and print of a contract has been where the fixtures were not written on the contract meaning for example if it's important to you to take your chandelier in the dining room which you know was heirloom that was passed down to your family. If it was not disclosed and written in the contract on the paperwork. Unfortunately you're required to leave that behind. And so by not paying attention to the fine details of a contract I mean there can be some big errors and mistakes that could happen and unfortunately there's nothing that you can do. You know also contingencies the biggest you know from state to state our contracts are different. Really the only contingency in North Carolina is a home to sell contingency. But you know with a contingency you really need to understand what the terms mean. So for example maybe the buyer has made an offer on your property. The buyer has their home under contract as well. And so of course they've done a home to close contingency It's called well the fine lines and print reads that should that buyer back out. OK so your buyer's home now that buyer has backed out on their home. You know if they give you notice within three days they do get back their earnest money. And so although you think we've passed due diligence now the earnest money is hard and firm.
Well that's not necessarily true. So understanding you know all of the terminology the fine print you know in a contract is very important and that's where a real estate agent a great agent like a really should come into play and really walk through the steps and to make you understand or help you to understand better all the terminology of the contract people paperwork
This is the show that helps you navigate the ins and outs of buying or selling a home here in the Triangle. It's this savvy real tour with Angie goal and the team at a realty.
The closing recap here on the savvy real tour where we feature a success story from the past week. Somebody who just recently sold or bought a home here in the Triangle using the help of a coal Realty and so Angie tells us the story who was able to celebrate this past week.
Yes. So we had Derek and Erica both of their names are spelled really cool by the way but Erica and Erica who moved here from New Jersey. And so they were a buyer client. They actually moved down here got an air B and B so pretty much just left everything came to North Carolina got to Air B and B in hopes to find the perfect place. She moved down here and already had a job lined up. Luckily she can just work from home wherever she wants to live. But he moved here with you know needing to now find a new position and new career which are just super excited about. So just kind of starting their lives all over again but they ended up doing some research online. They found our team they reached out to me I connected them with one of our amazing buyer Specialist Alex harder. And then from there you know he was great as far as giving them guidance finding them D perfect terms so they ended up buying in flowers plantation in Clayton my brand new home beautiful home. I actually had the pleasure to go to their blue tape walk through. So just kind of get to see the ham get to see the condition how it looked you know completed and those builders did an amazing job back yard. They closed last week. They are super super excited to now call Clayton and North Carolina their home and just you know start fresh but yeah it was just it was wonderful to have the experience to meet with them and we are so grateful that they chose us to help them along the way.
That's pretty cool. You know I'm always sporting my New Jersey Devils gear so maybe with some new Devils fans in town that's made you some new bestie. Yeah exactly. And see if they want to catch a game soon. That's right. Well there you go. Congratulations to Derek and Erika and if you want to experience a successful home closing like that whether you're looking to buy or sell here in the triangle and you call in the great team at Echo realty you're always there for you. You can call or text Angie directly to start a conversation about buying or selling your home and ask why Angie's team would be awesome to work with here in the area. You can call her text 9 1 9 5 3 8 64 77 Angie's been voted the 28 team number one real estate agent in Raleigh by Midtown magazine and the Indy weekly also named her number one in all of Wake County in 2018 2 9 1 9 5 3 8 64 77.
Again your number to call or text to reach Angie 9 1 9 area code 5 3 8 sixty four seventy seven. Stay right there. Much more to come on today's edition of The Savvy real talk with Angie Cole.
It's time for the mailbag. We want to hear from you
Zoe says we're looking for a home to buy right now it seems like inventory is down because of the holiday season.
Should we just pause our home search anyway during this time since we'll also be traveling and just resume next month. Or will we be missing out on a potentially good home during this time.
Yes. Oh that's a great question because of the mindset of a lot of buyers is if I wait until the spring market there will be more inventory and are you right 100 percent because sellers also feel like the best time to sell is the spring market. But remember homes are hitting the market every single day and that perfect home for you might pop up tomorrow. So you know I understand it's around the holiday season and I want you to be able to enjoy all that you're doing as far as traveling and maybe spending time with family you know. But be on the lookout still. And if there is something that comes through maybe your home search feed you know that looks exciting. Go and look at it because just because it's hit the market today it doesn't mean it will stay on the market through the holidays. There are so many homes that are actively selling. There's so many homes that are hitting the market now even though we're right here around our busy holiday season in December. I would say don't completely pullback and just stop your search. Just kind of still keep her eye out you know. And if you don't see anything that's fine and you can wait until January and really hit the ground running again.
Yeah it's a really good point and it's a good question I think to ask because some people do think that basically everything shuts down around the holidays. Right. But it's not necessarily the case now.
You know and what I always tell our sellers are the serious buyers are probably out looking now because if someone's not serious they do have all the hustle and bustle of the holiday season. They probably won't be wasting their time just be a looky loos and looking around at home to purchase right. So the serious buyers are out right now. And so now could be a great time to sell. And also again a great time to buy because there is new inventory in the market every single day.
You've been listening to the savvy real tour podcast. I'm Walter store Holt alongside Angie Cole. She's the owner and broker in charge of ACO realty here in the Triangle and if you have questions for Angie we invite you to go online to a call realty dot com. Listen to past podcast episodes on the Web site read the blog and all the great information including the option to find a home right there on the website. That's a cold reality dot com and you can also call ante with your questions. 9 1 9 5 7 8 31 28.
The above audio transcript of "PODCAST 023 - SPOTTING A GOOD OFFER - ANGIE COLE.mp3" was transcribed by the best audio transcription service called Sonix. If you have to convert audio to text in 2018, then you should try Sonix. Transcribing audio files is painful. Sonix makes it fast, easy, and affordable. I love using Sonix to transcribe my audio files.