Listing Courtesy of LINDA VISTA REAL ESTATE
It was only a few years ago that the last thing a prospective Rehoboth Beach home buyer had to worry about was being outbid. Those were the days when the bottom seemed to be falling out of the Rehoboth Beach real estate market. Anyone brave enough to be looking to buy at a time when the real estate market was frightening most folks away was not only plucky—they were also alone. Sellers who had to move no matter what found themselves forced to accept offers that they knew were well below their property’s true utilitarian value. The only saving grace was that those same sellers could turn around and buy in their new community at the same kind of crazy discount.
That, as they say, was then—and this is now. As the real estate market in Rehoboth Beach continues to revive, sellers’ mindsets have returned to normal. Knowing that their Rehoboth Beach home is a valuable commodity, they demand offers that are respectable. One national survey found that that buyers are acting quickly on the most sought-after homes, and that overall, median DoMs (Days on Market) fell to 32 in March from 40 just a month earlier.
As the spring selling season heats up, some buyers who find the home of their dreams may also suspect that they aren’t alone. It calls for definitive action—and if it looks as if just making an offer might not win the day, some additional action. For home buyers who have a good idea that they must act decisively or miss out, here are some options for increasing the odds that their offer will be accepted:
One tactic to prevent being outbid is to add an escalation clause to the offer. If allowed, such a provision states if the seller receives another offer, then the buyers are willing to increase their own offer to a set price. For instance, a home buyer who makes an offer of $310,000 might include an escalation clause in increments of $3,000 should a competing offer appears, up to a maximum of $360,000.
Since people have different reasons for selling their home, another tactic is to discover what's important to the seller. Perhaps they have a new job opportunity and need to vacate as quickly as possible. Or maybe they have plenty of time, and are holding out for the maximum price. Your agent may have a good idea what is motivating the sellers so that you can craft your offer around their requirements. If a normal schedule calls for an inspection period of 10 days, but the sellers want to move quickly, they may be motivated by a shorter inspection period.
Usually, home buyers find it prudent to keep the upfront earnest money pledged to a minimum, allowing them more leeway in limiting their loss if they decide to back away from the deal. Increasing the earnest money shows the sellers you are serious about completing the purchase. It also subtly affirms your financial stability. An even more substantial demonstration is to become pre-qualified with a mortgage lender. Unless an all-cash purchase is possible, it’s the best way to guarantee you will be able to act quickly. Even if competitive bidders appear, when you are a pre-qualified buyer, you increase your chances of winning out.
When I’m tapped to act as your buyer’s agent, I become your advance scout and strategic partner as you explore this spring’s exciting Rehoboth Beach real estate market. I hope you’ll give me a call! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestate.com
When the goals motivating the parties in a negotiation—including Delaware real estate negotiations—are understood by all concerned, the odds for success are greatly improved. In most cases where the negotiation is between a buyer and seller of Delaware real estate, the goals are straightforward enough that it doesn’t seem to require much attention. Yet with a negotiation as weighty as the buying and selling of a home, stripping down the motivations common to the various parties can be a clarifying exercise. Here is what you might call a negotiation matrix:
When a buyer puts together an offer, more often than not their mental decision-making process goes something like this:
— — — — — — — — — BUYER — — — — — — — —
I do not want to lose this house è|çI want to pay as little as possible
— — — — — — — — — —— — — — — — — — — — —
The reason for the colliding arrows is that the two goals run the risk of conflicting with one another. If the buyer’s offer is too low, another buyer could come in to swoop up the property, and: game over. If the offer is higher than would turn out to be acceptable to the seller, the second goal will have been needlessly sacrificed.
At the same time and on the other side, the seller is usually thinking:
— — — — — — — — — —— — — — — — — — — — —
I want to complete the saleè|çI want to bank the full asking price (or higher!)
— — — — — — — — — — SELLER— — — — — — — — — — —
It’s quite similar to the buyer’s mental process. Both are calculations of the risk vs. reward that making an offer and responding to an offer entails.
When a buyer makes a lowball offer, it signals to the seller that the “don’t want to lose this house” side is probably losing out to the “pay the least” side of the buyer’s calculation. If the seller is leaning toward the “complete the sale” side of his or her own calculation, the offer will either be accepted or countered with a significant discount. If the current inclination is more toward the “full price” side, the counter may contain just a minor discount.
This negotiation matrix is the barest of bare-bones reductions. In practice, it’s often a little more complicated. Offers often contain details about desired maintenance corrections or may be dependent upon outside factors (like selling their current home); counter-offers, likewise.
Where a possible negotiation can needlessly go off the rails is if either party becomes emotionally threatened by an offer or counter. And believe me, it can happen! What’s vitally important is that each side understands that the other’s goals are legitimate, even though at odds with their own. A lowball offer may be misguided, but it’s not evil. A refusal to counter at all is, likewise, a statement of a legitimate bargaining position. Either may be disappointing, but neither is necessarily evidence of bad faith.
It’s my job to help my buying and selling clients chart a course through the negotiation rapids while avoiding such emotional cross-currents. At best, they are a needless distraction; at worst, obstacles that can prevent a meeting of minds. Appreciating the legitimacy of everybody’s motivations before the actual numbers start to fly is a good way to prepare. And, as usual, calling me is another prudent idea! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.