Buyer Negotiation Strategies

Buyer Negotiation Strategies

Sellers spend their time, energy and money to get their home ready for the market. When the home goes into the multiple listing service, they are excited because they are moving. However, it’s just the beginning of the negotiations.

Buyers are using different strategies to ensure their offer is accepted by the seller when there are multiple offers on a property. For example, one of the strategies is to offer over the asking price and hope that necessary repairs will be discovered during the inspection period or the appraisal will be less than the sales price. Buyers will ask for a substantial credit as an opportunity to re-negotiate the price with the seller.

To help our sellers combat this tactic, we suggest that when they receive multiple offers, is to accept a second offer in the back-up position. This provides the seller with leverage. When the buyer’s inspection negotiation strategy comes up, the seller can move on to the buyer who is in the back-up position if they aren’t able to come to terms. With advance planning, the buyer negotiation strategies can be avoided.

Some transactions can die because of last minute demands from buyer. Recently, we had a transaction where the buyer offered over the asking price and during the inspection period, they asked for a huge chunk off the price. Luckily, we had an accepted offer in the back-up position and my client declined the buyer’s request. The seller moved on with the buyer that was initially in the second position and the transaction closed.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Real Estate Websites & Actual Market Value

How accurate are websites in determining actual market value?

Websites, such as Zillow & Trulia, search tax records to determine the homes sq./ft. and input the sq./ft. into an algorithm to determine a value based upon the average price per sq./ft. Unfortunately, they don’t take into consideration, location, condition, upgrades etc.

Zillow and Trulia are a great place to look for real estate trends but as a specific evaluation tool, it’s unreliable.

Condition is a big portion of value and websites are unable to peer into a house and adjust the value based upon the condition.

The Birmingham Alabama Business Journal stated home value evaluation websites accuracy is within 5% of true value only 50% the time.

The best way to find out the true market value of your home is having an actual human determine the value. A real estate agent is able to provide you with a market analysis and take everything into consideration. Besides, a professional market analysis is complimentary.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Seller Strategies For Buying & Selling

Seller’s Strategies For Buying & Selling

Some sellers who want to sell their home are feeling stuck. They are worried about finding a new home in this market.

I spoke with a seller yesterday with that exact fear. She wants to sell but she’s worried that she won’t be able to purchase a replacement property.

For example, let’s say a seller accepts an offer that they cannot refuse, what would happen if they cannot find a new home?

Planning in advance is essential.

A couple of options is to negotiate a long closing or a rent back period. A seller could rent their property from the new homeowner for a specific period of time after closing.

If you don’t plan in advance, you could have a problem. If the seller fails to follow through with the agreement to sell their home, they can be sued for specific performance.

For example, we had a seller who quit his job and decided to move out of state. We put his home on the market, he accepted an offer, inspections and an appraisal was completed etc. Toward the end of closing, he was offered a new job in Portland and accepted. We asked the buyer if they would let our seller out of the transaction. They wouldn’t as they wanted to proceed with the purchase per the agreement. My seller was forced to choose between being sued or proceed with the sale. He close to sell and purchase another home in the neighborhood.

In an effort to make the sale & purchase as easy as possible, plan in advance.

Tune in to KXL’s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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The Current Real Estate Market & Cash Buyers

The Current Real Estate Market & Cash Buyers

CNN has reported that the number of cash real estate transactions in the first quarter of 2014 more than doubled compared with last year. What’s causing this?

I think it’s the shortage in inventory. It’s causing multiple offers on properties. If you want to make your offer as strong as possible, it’s best to offer cash or a large cash downpayment.

Sellers are selecting the strongest offer and sellers are specifically looking for buyers that are able to pay cash and close quickly. When a buyer pays cash, the seller doesn’t need to be concerned about an appraisal and the strict underwriting guidelines.

According to CNN, Miami, New York, Boston, and the California Coast are attracting foreign cash buyers. Is it the same in Portland?

Yes. If you come over from a foreign country to buy a real estate in the United States, it’s likely that you do not have a credit score or credit history. Therefore, it’s likely that you will need to pay cash to purchase a property in the United States.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Home Buyer Trends

Home Buyer Trends

How does the current home buyer trends compare to 2013?

It’s been fascinating to watch. Last year was the year the first-time home buyer and investor. Low interest rates coupled with appreciating home prices made sense for existing home owners to stay put while it gave an opportunity for investors & first-time homebuyers to enter the marketplace.

This year, as prices have been appreciating, we’ve seen current homeowners selling their existing homes and moving up.

Will the “move up” market impact price?

Absolutely. With the influx of homes on the market, it has created more of a demand which we feel indicates that the prices will continue to increase.

Will this be beneficial for higher-end or lower-end homes?

It seems to be more beneficial for higher-end homes as homes over $500k are starting to sell.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Portland- Top Moving Destination

Housing Costs: Reason why Oregon Was the Top Destination Last Year

One reason Oregon was the top destination last year among people moving state-to-state, was housing costs.

Oregon is affordable compared to other areas. If we’re strictly talking about home prices, medium sales price in Portland at the end of 2013 was $265,000. For comparison, Seattle was around $310,000, Los Angeles around $500,000 and San Francisco around $640,000.

Are there any signs that the housing cost in the Portland will catch up with the more expensive cities?

As the numbers show, we are affordable in comparison to other major metropolitan areas. Our guess is that Portland will appreciate at the current rate.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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What is a Boomerang Buyer?

What is a Boomerang Buyer?

A “Boomerang Buyer” is someone who lost their home due to foreclosure or short sale but could be back in the market to buy another home.

Are there many boomerang buyers out there?

There are literally millions of ex-homeowners who lost their homes and may qualify to buy a home again.

How much of the factor could the boomerang buyers be in the housing market recovery?

There are a millions of potential purchasers which could have a very significant impact on the market. In fact, FHA has introduced the “Back To Work Program” to assist these buyers. The program allows buyers to obtain an FHA insured loan in as little as 12 months after a short sale or foreclosure as long as they can prove it was due to a qualified hardship.

If you’ve had a short sale or foreclosure over twelve months ago and you are thinking about purchasing a home, contact a Realtor and Mortgage Broker to see if you qualify.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Real Estate Broker Required Education

Some Real Estate Agents Failed to Keep up with their Required Education

According to The Portland Business Journal, 45% of agents that were audited fell short of meeting the legal requirements to renew their real estate licenses.

A seller who’s real estate agent who’s hasn’t completed their required education may be putting both themselves and the seller at risk. It’s difficult to find out if an agent has completed all the required continuing education courses. However, you can find out how experienced by their production and chances are they will be more up-to-date with the required education to maintain their license.

The state is paying closer attention to this. We understand that they’re working on a system for course providers to be automatically notified when an agent takes a required course. While it’s likely to be an overwhelming task to keep up with the nearly 900 renewals of agents here in Oregon every month. There are nearly 19,000 agents in Oregon.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Federal Reserve reducing mortgage-backed securities purchases

Federal Reserve starts pulling back on Mortgage-backed Securities

One of the ways the federal government boosts the economy is by purchasing treasury bond and mortgage-backed securities. This is one of the reasons the mortgage interest rates have remained so low. They are planning on reducing the amount they spend on purchasing the mortgage-backed securities by approximately 10 Billion a month. They’re lowering their purchasing from 85 Billion to 75 Billion.

Needless to say, this will impact interest rates. But, they announced at the same time that they intend to keep the federal funds rate near zero for longer than they originally planned. Interest rates are a little higher, but didn’t really take much of the hit.

As the economy continues to improve, we’ve been anticipating this announcement at some point.

What will home loan interest rates be in 6 months? Well, we never know for sure, but our expectation that they will increase but still be under 5%.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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How Much Salary Does It Take to Buy A House Around Portland

How Much Salary Does It Take to Buy A House Around Portland

A survey by an outfit called HSH.com says you need to earn about $49,000 a year in Portland to cover the principal and interest payments on the average home in Portland.

That study was part of the third quarter numbers and they equate with the medium price sold in Portland at about $276,000.

Houses in Portland are not as affordable as they were a year ago. We have had appreciation somewhere at 15% in the last year which of course is good but it doesn’t mean that homes are more expensive and at the same time we’ve had interest rates go up a little bit so all that affects affordability.

The interest rate bounce around a lot they’ve definitely have gone up and it affected affordability. For every 1% rise in interest rates we lose $10,000 in house, so if you combine that with the market where home prices are going up, affordability is gonna go down. It’s a good reason to buy now.

Right now for loan rates, we got 30 year fixed at about 4.375 and they have a tendency to bounce around a little bit but they’re gonna stay right about there.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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