Blog :: 05-2019

Amanda Davidson Real Estate Group is Northern Virgina's most trusted local, independent resource for real estate news and insight. Our team has its finger on the pulse of the real estate market in Alexandria and the surrounding counties. Here you'll find the latest market updates, local news, and tips for buyers and sellers.

5 Things To Know When Buying A Rental Property

5 Things To Know When Buying A Rental Property

If you’re a homeowner who also wants to become a landlord there’s a lot to consider. Surprises when buying a rental property are never welcome and can often be avoided. Before you become an investor check out 5 things you need to know when buying a rental property.

 

The rental market in Northern Virginia is extremely strong and prices have been rising for over 10 years. Demand for rentals is high and millennials make up a large amount of the demand. They are often opting to rent well into their 20’s due to the high real estate prices in this area combined with student debt and older child-rearing years.

 

High demand in a desirable market like Northern Virginia creates an excellent opportunity to purchase an investment property.

 

Here’s what you should know when buying a rental property.
 


Location

Let’s say it again … location, location, location. It really is THAT important. Selecting a market with low vacancy rates and high demand should be at the top of your list when buying a rental property. It’s the simple law of supply and demand. The higher the demand and the lower supply the better. A highly sought after location will be a costly investment but, it will also mean a higher return both in the form of monthly rent and in property appreciation. As the value of your property rises you’ll be passively making money on top of the rent you’re collecting.

 

Location Part II – Walkability

 

When buying a rental property location isn’t just the big picture of what city to buy in. It’s also what neighborhood to buy in. Proximity to shopping, dining, entertainment, and the ever sought after public transportation should all play a role in your decision-making process. Walkability is directly attributed to a higher home value. Walkability is also a key factor to millennials looking for their next home.

 

The ability to walk inside a particular area is also significant from a natural viewpoint. According to the Urban Land Institute, when work, home, shopping, cafés and travel are within a quarter-mile to half-mile of their homes, most buyers prefer to walk rather than drive. As a result, there is less air contamination.

 

The walkability of a property also allows you to spend less time and money driving to shopping, feasting, diversion, stimulation and even work destinations, particularly because you have the choice of walking to any place you need to go. This also means cost-effectiveness – even when homes in a walkable area are a little too expensive, the lower transportation expenses implies that the total average cost of living is about the same as living in a lower-valued area because of the longer drives and higher transportation costs.

 

The idea of walkability is also good with modern trends in our society. Based on studies, miles driven per individual has been dropping since the mid 2000s, and the baby boomer generation is already beginning to phase out of their peak driving years. Moreover, milennials – who are entering or in their peak driving years – are driving around 33% less than baby boomers did at their age. With less enthusiasm for owning and driving vehicles, it is so easy to see why individuals who are looking for rental properties today prefer walkability.

 

Property Taxes

Where you buy your rental property will determine what the property taxes are. This all goes back to location too. Property taxes can vary drastically by location and this is another important factor to consider when buying a rental property.
 

For example, in Fairfax County homeowners pay $1.15 per $100 of assessed value compared to Arlington County where homeowners pay $1.013 per $100 of assessed value.

 

When buying a rental property you’ll want to ensure the monthly rent is high enough to factor in what you’ll owe on property taxes.

 

You need to ensure your rental property is in a location that provides a high enough monthly rent to make up for what you’ll pay in property taxes.

 

 


Maintenance Expenses

When you own a rental property you still have the responsibility of maintaining the property as if you were living there. Ongoing maintenance is inevitable and it could be as small as a leaky faucet to as large as replacing the HVAC. When buying a rental property pay close attention during the home inspection. This is a prime opportunity to learn about the property and understand if there are large items that are nearing the end of their useful life that will require budgeting for a replacement in the near future.

 

Depending on what type of rental property you buy your maintenance costs will vary. For example, if you purchase a single family home you will be responsible for the roof and siding. If you purchase a condo it’s not likely you will have that responsibility but, you will have a condo fee to pay each month. There are pros and cons to both.

 

Ownership of a rental property is a long-term investment and budgeting is going to be required each month regardless of what type of property you buy. Doing so will prepare you for expenses throughout the time you own the property.

 

Property Management

Will you need property management when you buy your rental property? Depending on where you’re located and where your rental property is located this might be something to consider. Your schedule and daily demands should also factor into this decision. If you live in a different state than where your rental property is located it may even be a requirement to have property management. Property management is another expense to consider when factoring your return on investment.

Before you choose between self-managing your property and hiring a property manager, you need to understand what goes into managing rental properties.

If you are a novice investor, you may see a rental property as a simple equation of: rental income - (mortgage + expenses) = profit.

While this formula is the most basic formula for any investor, you also have to include your landlord duties and energy into that equation. As an investor, you may opt to hire a property management company to handle these duties or self-manage your rental properties. If you are cutting down on your expenses, you may opt to self-manage. There are a lot of investors who have found success in self-managing their rental properties as a way to cut down on their management expenses.

To determine which option is best for your portfolio, consider all the landlord duties you will be taking on if you self-manage or that you could pay a property manager to handle. These duties may include a monetary expense and always include the time required of you or your manager.

 

Are you ready to buy a rental property?

These certainly aren’t the only things to know when buying a rental property but, all of them should be at the top of the list of things to consider. Buying a rental property can be a very wise investment but, as with any other investment you have to do it correctly. Not every property is the right rental property investment. Enlisting the expertise of a trusted real estate agent who has experience working with investors is always wise. Do your homework and make sure you’re selecting the right property, doing so will set you up to earn a passive income for years to come.


 

Additional Resources

How To Pick A Neighborhood You'll Love

 

Counteroffer Mistakes In Real Estate

Counteroffer Mistakes In Real Estate

Many home buyers, especially first time buyers make counteroffer mistakes. Some believe a seller will always counter and others sit on a counter offer from the seller putting themselves in jeopardy of losing the house.

 

A counteroffer from a seller isn’t guaranteed. Depending on how long the home has been on the market, how many showings there have been, and the seller’s motivation to move they may or may not counter the offer a buyer submits.

 



Counteroffer Mistakes On New Listings

Homes that are new listings will rarely sell at less than list price. A home that sells within the first week of being on the market was priced at or below fair market value. The market speaks when homes are priced correctly! It’s a risky plan to try to negotiate thinking the seller is going to counter when the home is newly listed.

 

Counter offers are not guaranteed and even if the seller counters there’s another mistake buyers frequently overlook.

 

The Time It Takes To Process A Counter Offer

Time opens the opportunity for another buyer to tour the home and write an offer. It could very likely be a full price offer and even stronger financing or better terms.

 

→The listing agent and seller connect to talk about and analyze the offer
 

→Seller agrees to counter – the counter can be on price and terms
 

→The listing agent makes the changes and sends to the seller to sign, the seller may not check email until

    the next morning to sign
 

→The listing agent receives the signed counter, sends it to the buyer’s agent

 

→Buyer’s agent contacts the buyer to share the counter and discuss the changes. Buyer has to decide

    whether or not to accept the counter or counter back

 

→Buyer decides to accept

 

→Buyer’s agent sends the contract to the buyer to sign

 

But, wait – there’s a counteroffer mistake about to happen.
 


Before the buyer signs to accept the sellers counter the listing agent calls the buyer’s agent to share another offer has been received, it’s stronger, and the seller is withdrawing the counter.

 

Poof! There goes the house because too much time passed.

 

Every item above can take hours. The listing agent, seller, buyer agent, and buyer all have work and life happening while handling a counter. They don’t get finalized in the blink of an eye! Because of that emails may sit for an hour or two, phone tag can be played, and then there’s time to consider the counter terms. A day can easily pass before acceptance or counter are delivered back to the seller.

 

Why Is This A Counteroffer Mistake?

Because the odds of you being the only buyer in the marketplace or even the only buyer interested in the home are low. Non-existent in some markets. What you find appealing in a home probably isn’t drastically different for any other home buyer.

 

So, it’s another counter offer mistake to open the opportunity for the seller to have another buyer submit their offer.
 


Just because the seller countered doesn’t mean you’ve secured the house.

 

24 hours or more is very common when it comes to counter offers. That’s more than enough time for another buyer to write an offer. A strategy the first buyer overlooked because they were hoping to negotiate.

 

Buyers who are looking to save by offering less on a home don’t see that it’s a counteroffer mistake. There was never any savings to be gained if the seller had no intention of accepting a lower offer.

 

Even if the seller countered and was willing to accept a few thousand less it still opens the opportunity for another buyer to come in and secure the home.

 

Don’t be the buyer that makes a counteroffer mistake. Sellers don’t always counter the offer and even if the seller does you can still lose the house if it’s still being shown.

 

**These scenarios don’t apply to every market – market conditions matter. They do however apply directly to my market at the time this post was written

 

 

Hayfield Farm Alexandria, Va 22315 – May 2019 Market Update

Hayfield Farm Alexandria, Va 22315 – May 2019 Market Update
Hayfield Farm is located in the Kingstowne area of Alexandria. Situated off of Telegraph Road between Fort Belvoir and the US Coast Guard Station. This neighborhood offers both convenience and privacy, as you drive through you’ll enjoy the well-established trees and landscaping.

 

The community is composed of 691 single family homes. Construction began in the mid-1960’s and the last homes were completed in 1972. Hayfield Farm offers different home styles including; colonial, rambler, split level, and split foyer.

 

There is no HOA for the neighborhood but, community members are encouraged to join the Hayfield Citizens Association.
 


What’s Nearby Hayfield Farm?

Kingstowne is just a few minutes from the neighborhood where you’ll find access to multiple grocery stores, restaurants, retail stores, and Kingstowne 16 Movie Theater.

 

Hilltop Village Center is less than 2 miles up Telegraph Road home to Wegmans, Burtons Grill, Verizon, Sprint, Green Turtle, Massage Envy, NY Bagel, LA Fitness, and many other dining and retail options.

 

Old Town Alexandria is also just a short drive from Hayfield Farm. Take a stroll along the waterfront or look at the unique shopping the area has to offer. As with most neighborhoods in the Kingstowne area commuting from Hayfield Farm is very convenient. Access to 395, 495, 95, and Fairfax County Parkway are all within minutes from the neighborhood. Metro, VRE, and Amtrak are all also easily accessible.

 


Hayfield Farm Real Estate Market

The following is a review of activity in Hayfield Farm since January 2019.

•Number of Sales: 8

•Highest Priced Sale: $601,000

•Lowest Priced Sale: $473,777

•Median Sales Price: $573,225

•Median Days on Market: 77

•Median Sale Price to List Price Ratio: 96.5%

 

The year to date data is a bit skewed for days on the market due to 3 homes that took well over 100 days to go under contract. Price and condition both played a factor in the days on the market being high for the neighborhood. These are outlier sales and not the typical turn time that neighborhood is currently experiencing.

 

Real estate activity in Hayfield Farm since April 2019 paints a more realistic picture of the current conditions in the neighborhood.
 

•Number of Sales: 3

•Highest Priced Sale: $601,000

•Lowest Priced Sale: $572,450

•Median Sales Price: $590,000

•Median Days on Market: 16

•Median Sale Price to List Price Ratio: 100.18%
 


What Schools Will The Kids Attend?

Kids that live in Hayfield Farm will attend Hayfield Elementary and Hayfield Secondary both of which are in walking distance from the neighborhood. To learn more about these schools check out the GreatSchools website. 

 

The Current Real Estate Market In Hayfield Farm

There are currently no homes for sale in Hayfield Farm. Inventory is needed at this time and the neighborhood continues to experience a seller’s market.

 

Buyers

Homes that are reasonably updated and priced correctly are moving quickly. Due to supply not keeping up with demand buyers need to be poised and ready to act quickly.

 

If you’re a buyer in the current market the odds of your tastes in a home are probably not much different from any other home buyer. Because of this when you find a home you love it’s highly likely another buyer will love it too. Don’t delay when it comes to touring homes and making a strong offer in the current market conditions.
 


Sellers

If you are thinking about selling your Hayfield Farm home the market is in your favor. That, however, doesn’t mean proper preparation, pricing, and attention to detail don’t matter.

 

In order to get top dollar in the shortest time possible, your home needs to show well and make the right first impression. Creating demand for your home is a must and that starts online with pictures that entice buyers to want to see it in person.

 

Browse Homes For Sale in Alexandria

 

Tips For Millennial Home Buyers

Tips For Millennial Home Buyers

Millennial home buyers are defined as someone who is in the 18-35 year age bracket. Many millennials have thought about purchasing a home but, due to rising home prices and student debt haven’t taken the leap.

 

Although millennials have seen the struggle in real estate during the recession the dream of home ownership is still alive and well. The majority of millennials want to buy a home and there are options available for that to become a reality but, it takes proper planning and a little patience.

 

Real estate should be viewed as a long term investment. There will always be ups and downs but, if you’re looking at it from a long term view and are in a good financial position it’s something to seriously consider.

 

Deciding between renting and buying is a big decision. Think about the long term and years from now you will likely be glad you opted to buy instead of rent.

 

Real estate is not a get rich quick scheme. It takes hard work and patience.
 


Millennial Home Buyer Tips
 

Work With An Agent You Trust

This tip really applies to every home buyer but, as a millennial you’ve most likely never bought a home before so it’s extremely important you pick an agent you can trust. Your agent will (and should) know more than you and because of that, you will be relying on their advice. Ask for referrals from family and friends who have purchased a home before. Then interview different agents and ask questions before you select the agent you feel is best suited to represent you.

 

Think about what you’re looking for in an agent and base your questions around that. Does the agent have references? Do they actively sell homes? This is an important one because if they do it means they’ll have a pulse on the current market conditions.

 

Ask how many clients they work with at one time. You need an agent that can work with your schedule and devote time to helping you. If they’re overwhelmed with clients that’s probably not the best fit. Do they practice dual agency? You want your own exclusive representation.

 

As a first-time home buyer, you need someone that can answer all of your questions in a timely manner. Don’t settle for just any agent, you deserve the best representation.
 


Pinpoint Locations and Neighborhoods

A big part of buying a home is to determine where you want to live. Location, location, location might sound cliché but, the old saying is spot on.

 

You can always change how your home looks but, you can’t change its location. Understanding how to pick a neighborhood you'll love is important. The location of a home impacts value and the ability to sell down the road; check out the guide to learn more about the importance of walkability, crime, and schools.

 

Type Of Home
Buying a home requires a decision on what type of property fits your lifestyle. Condo, townhouse, or single family are the most common options but, not always the only options depending on what area you’re in.

 

When deciding on a type of home think about how many people (if any) will be living there. Do you need or want a yard? Do you travel a lot and want a low maintenance property? Are you looking for amenities such as a pool or fitness center?

 

Asking yourself these types of questions will help you decide what type of property is best. Remember to think long term, not just about your immediate needs.
 


Know Your Numbers

Purchasing a home comes with costs that you might not be aware of. There are different fees that you’ll want to account for. Expenses will occur before you actually own the home such as home inspection costs and the appraisal fee.

 

Obtaining a mortgage comes with fees that will be a part of your closing costs. These are just a few of the costs that come with purchasing a home.

 

There will also be moving fees and expenses that come after buying a home including maintenance and utilities.

 

Knowing your numbers up front and planning for the long term will save you a lot of stress and keep your budget on track.

 

Closing Thoughts For Millennial Home Buyers

Buying a home is a big decision. It’s one that requires careful thought, planning, and patience. Take your time and do your research.

 

Assembling a trustworthy team of experts to guide you through every step and waiting to buy a home that you love will benefit you for years to come.

 

 

Kingstowne Home Sales April 2019 - Market Update

Kingstowne Home Sales April 2019 - Market Update
The market in Kingstowne is strong and moving quickly. Homes are selling for top dollar and demand from home buyers remains strong.
 

April 2019 Kingstowne Home Sales

•Number of Sales: 51

•Highest Priced Sale: $820,000

•Lowest Priced Sale: $279,550

•Median Sales Price: $522,000

•Median Days on Market: 14

•Median Sale Price to List Price Ratio: 100%
 


Is It A Buyer’s Or A Seller’s Market?
No surprise that it remains a seller’s market but, there is good news for buyers. Inventory has increased – while it might be a small increase it’s still good news. There are currently 49 homes for sale in 22315. The homes range from $285,000 up to $1,099,000.
 

View homes for sale in Kingstowne
 

Inventory in Kingstowne

When supply doesn’t keep up with demand the market moves quickly and that’s exactly what continues to happen in Kingstowne. The location of Kingstowne and amenities make it very appealing to buyers and they continue to seek homes in 22315 and the surrounding area.
 


Sellers

Homeowners who are considering selling their Kingstowne home can rest easy that there are buyers actively looking to move. Because of that homes are selling for top dollar. However, in order to achieve top dollar when selling your Kingstowne home you have to properly prepare it for the market.

Buyers are looking for homes that are turnkey ready and have a reasonable amount of updates. There are very few buyers who are looking for homes that need work, especially when it involves the kitchen and bathrooms.

Allow yourself plenty of time to get your home ready for the market. Every last detail matters and you want to home to shine on picture day. Photos are what will draw homebuyers in online and then want to come for a tour in person. Gone are the days when the first showing occurs in person – the first showing is online! 

Get a free home value estimate within minutes. Our home value tool is just a guide, and to be used solely to receive an immediate estimate. If you’d like to receive a free current market analysis customized for your home reach out to me and let’s connect! 703-431-3755 or amanda@amandadavidson.com.

 


Buyers

If Kingstowne and the surrounding area is your desired location be prepared for the current market conditions. Have a consultation with your agent prior to looking at homes to determine your must-haves vs. your would like to have. Understand your budget by getting fully pre-approved before heading out to tour homes.

The market is moving quickly and being prepared is your best asset. Not only will it save you stress and disappointment it will also put you in the best position possible to secure your future home.

When you find the one be ready to make a strong offer. Delaying even a day in the current market conditions can mean the property is already under contract. Multiple offers are still alive and well. Working with an agent who knows how to set your offer apart from the rest is important.

If you work with an experienced agent who understands the intricacies of the market you’ll find your home buying experience smooth and enjoyable. Have questions about buying? Contact me to learn more.

 

See homes for sale in Kingstowne
 

Additional Real Estate Resources

First Time Home Seller Tips

Pre-Approval vs. Pre-Qualification

5 Questions You Should Ask Before Hiring A Real Estate Agent To Sell Your Home

 

 

 

Lead Generation For Real Estate Agents – There's No One Size Fits All

Lead Generation For Real Estate Agents – There’s No One Size Fits All

There is nothing easy about getting started in real estate and even when you’re a seasoned pro it’s still not easy. The challenges are different but, the words real estate and easy rarely belong in the same sentence together. So as a new agent what should you do?

 


There’s a recurring theme in the new agents I talk to. When we sit down to talk about their challenges and where they want to improve they’ve all been told to cold call, door knock, and hold open houses to get leads. Now, there’s nothing wrong with any of those lead generation techniques but, that doesn’t mean they’re right for every agent. Odds are if those were working these agents would never be talking to me.

 

As a real estate agent asking yourself who you are is the foundation for what type of lead generation you should conduct. What do you like to do outside of real estate? What makes you happy? What do you dislike? If you break out in a sweat like me at the thought of cold calling don’t do it! A broker I worked for early on essentially told me to cold call or else. I did it and I was horrible, as in the absolute worst. If you’re doing something that doesn’t align with who you are you’re not going to be very good at it and you’re going to dread it.

 

Do you like the idea of relationships more than cold calling? It might take you longer to grow your business but, you’ll be growing something rock solid that’s far deeper than a transaction-based business.
 


Farming can even be about building relationships. Building relationships doesn’t mean you call everyone you know and ask them to send you referrals. Building a relationship is about providing value. You get what you give. 

 

There’s no one size fits all when it comes to running a real estate business. Where you’ll go wrong is if you decide not to be authentic and just do what someone is telling you. I’m not saying you’re going to love everything you do but, if it feels like it’s not genuine or coming from a place that doesn’t match your personality it’s not going to work. You might get some clients but, I guarantee you they won’t be the kind you enjoy working with or feel aligned with.

 

Whatever route you take to get business make sure it’s one that’s authentic to you. If that’s cold calling, great! If that’s farming, great! If that’s connecting with your sphere, great! Every single lead generation idea you can think of works but, only when the person doing it is confident that it’s the right approach for their business.

 


 

6 Common Reasons Homes Come Back On The Market

6 Common Reasons Homes Come Back On The Market

No home seller or agent wants to go from pending to active and back on the market. Buyers and sellers make an agreement on a home and everyone including the agents hope the sale goes according to plan but, unfortunately, that’s not always the case. So, why do pending home sales fall through? There are quite a few issues that can come up leading to a home going back on the market.
 


Re-listing a home as active again can cause buyers to be concerned that there’s something wrong with the home. That’s a myth and not always the case. As long as your agent can determine what caused a contract to fail homes that come back on the market aren’t something to blacklist during your home search.

 

Whether you are buying or selling knowing why homes go back on the market is useful so that you can do your best to avoid these situations.

 

Home Inspection Problems

Problems from the home inspection are the number one reason a home comes back on the market. It’s a home inspector’s job to go through a home and identify problems.

 

After the home inspection is completed the home buyer may now be aware of some problems with the home and they could be costly. The seller can always negotiate to come to an agreement to have repairs completed, reduce the sale price, or credit the buyer. If an agreement can’t be made between the buyer and the seller the buyer can walk.
 


Home inspectors can make mistakes occasionally, after all, they are human. However, most of the time they are well trained and in Virginia they have to be licensed so odds are if they find a big issue it’s worth looking into.
 

There is a way to prevent a house coming back on the market due to home inspection problems. How? Get a pre-listing home inspection before you put your home on the market. Then you’ll know the condition of your home before it hits the market and can address any issues that need to be resolved.

 

Being prepared for the buyer’s home inspection always works in your favor. Follow these 5 tips for a smooth home inspection.

 

The Home Didn’t Appraise

If the buyer is obtaining financing and doesn’t waive the appraisal contingency there will without a doubt be an appraisal conducted on the home. An appraiser will analyze properties similar to the subject home and review recent sales in the area. Upgrades, special features, number of beds and baths, lot size, and location are all factors an appraiser will consider.

 

If the appraisal comes in at lower than the agreed upon price and the buyer and seller cannot come to terms the buyer can walk.

 

The Buyer’s Financing Was Denied

Buyers can get pre-approved and pre-qualified for a mortgage but, that doesn’t mean their financing is guaranteed. If a buyer loses his or her job they could find that buying a home is no longer an option.

 

It’s good business for a listing agent to contact a buyer’s lender to ensure they are able to qualify. Doing so doesn’t mean it’s a sure thing though. Some lenders pre-vet buyers better than others. Some buyers make dumb decisions such as taking out another loan during the process home buying process that causes them to no longer be able to buy.

Buyer’s Remorse

Real estate isn’t exempt from buyers getting cold feet. It can happen for a variety of reasons.

 

Perhaps they made an emotional decision because there were multiple offers and they got caught up in winning a bidding war. Maybe the home was just so perfectly presented they made an offer before thinking about it financially being a stretch.

 

Whatever the reason for buyer’s remorse it leaves sellers in a bad spot. Even if a buyer has to forfeit their deposit that still means the seller has to find another buyer. Deposits are in place to discourage this type of behavior.

 

The higher the deposit the better for the seller. Even with a high deposit that doesn’t mean there’s no chance of the buyer getting cold feet and backing out.

 

Buyers Could Be Submitting Offers On Multiple Homes

Unless a buyer can afford to buy more than one home at a time they shouldn’t be making offers on multiple homes. However, depending on market conditions there are cases where buyers are working with an incompetent agent who is willing to write offers on multiple homes at one time knowing the buyer can’t buy more than one.

 

All it takes is two offers being accepted at the same time and there’s a big problem.

 

Sound far-fetched? It’s not and it happens more frequently when markets are very competitive. It’s not only unfair to sellers and agents it’s just plain deceitful behavior.

 

To avoid a home going back on the market because the buyer made offers on multiple homes the listing agent should have a conversation with the buyer’s agent. The goal being to get as much information about the buyer’s sincerity in the offer before the seller accepts it.

 

It doesn’t remove the risk but, it lessens it for the seller. The more that’s known about the buyer’s intentions the better.

 

Title Issues Are Uncovered On The Home

Title issues can put a halt to a sale quickly. There are a variety of ways these can occur; illegal deeds, unknown easements, forgeries, unreleased previous mortgages, and liens.

 

As soon as a home is pending the title search should be done promptly. The most common title issue is a lien that is tied to a property. This means that the debt has to be paid before the owner can sell the home. If that can’t be accomplished the sale cannot happen.

 

Closing Thoughts

Homes come back on the market for a variety of reasons. There are cases when coming back on the market can be avoided and there are others where it can’t be. All parties, agents included should work together to the best of their ability to achieve a successful outcome.  
 

 

Additional Resources

Putting A Home Back On The Market Due To A Failed Home Inspection via Bill Gassett of RE/MAX

How To Get A Mortgage via Luke Skar of Madison Mortgage

 

 

 

 

How To Handle A Low Ball Offer

How To Handle A Low Ball Offer

Low ball offers are frustrating to homeowners and can be one of the top challenges when selling a home. Most, if not all homeowners have a certain amount they want to sell their home for and when an offer rolls in that’s $15,000 - $20,000+ less than asking it can be downright infuriating.

 


Real estate transactions have hurdles to work through and they’re not all easily put together. Negotiation is a part of real estate and it’s a regular occurrence for there to be back and forth between the buyer and seller before mutually agreeable terms are found. A low ball offer can be the start of negotiation but, it requires the proper steps be taken in order to turn that offer into something that’s acceptable for the seller and the buyer.

If you are selling your home and have received a low ball offer take a deep breath and consider the following advice on how to handle a low ball offer in real estate.

 

Why Do Buyers Make Low Ball Offers?

From trusting Zestimates or thinking the house isn’t worth what it’s listed for, to taking advice from their agent or family and friends there are a plethora of reasons buyers make low ball offers. Some buyers just like to throw something up against the wall to see if it will stick, testing the waters if you will.

 

How To Handle A Low Ball Offer In Real Estate

Control Your Emotions
Easier said than done, I know but, remind yourself this is a business transaction and emotions don’t mix well with business. Letting your emotions take control is only going to cause you more stress. A low ball offer might make you want to tell the buyer to pound sand however before you do that remind yourself that the offer is just a starting point.

The goal is to sell your home and if you tear up the low ball offer and trash it you’re not going to be any closer to achieving your end goal.
 


Always Respond With A Counter

If you don’t respond to a low ball offer you have zero chance of finding common ground and coming to agreeable terms. On the flip side if you counter there is always a chance through negotiation all parties will come to terms.

There are different strategies when countering a low ball offer.

Going back at full price is one that is very common to send a signal to the buyer that you aren’t messing around. This is not the best negotiation strategy in my opinion because it could deter the buyer altogether.

A strategy I’ve found to be more successful is to respond with the lowest and final price you are willing to accept. Taking this route can eliminate back and forth with the buyer and shows them you are serious about selling but, not at a low ball price.

Whatever strategy you opt to take always, always, always counter a low ball offer.
 


Review All Of The Terms In The Offer
Price is just one factor of an offer and while it’s an important one it’s not the only component to look at. There are other contingencies and terms in a purchase offer and when you’re deciding how to respond you want to look at each detail closely.

What other terms should you consider?

→Seller Concessions

→Earnest Money Deposit

→Inspection Contingencies (home inspection, radon, and termite in Virginia)

→Appraisal Contingency

→Financing Contingency or Cash Buyer

→Closing Date

 

It’s never just as simple as price when it comes to a purchase offer in real estate. An offer is a total package and while the price is often what you first look at it’s not the only term to consider.

 

Look To Your Realtor For Guidance
Low ball offers are just one of many reasons it’s imperative to hire a top Realtor to sell your home. If you are working with a pro a low ball offer is just another day at the office. Your Realtor will be able to guide you on how best to respond and remain calm and professional. Rely on your Realtor for advice and allow them to be your advocate.

 

Closing Thoughts On Low Ball Offers
You’re not the first seller to receive a low ball offer and you definitely won’t be the last. Take a deep breath and remove your emotions when it’s time to consider how you want to counter. Your end goal is selling your home and making that your priority is what matters most.