Tuesday, August 23, 2011

So you have a low offer

What's the next move?

I look at buying and selling real estate as a fine dance, with either party leading and following through carefully orchestrated steps. The problem is, if you don't know the moves then chances are good your feet will be stepped on.

In a market that finds buyers and sellers so far apart, negotiating a sale can be challenging. There's no question every market is different. Take the east coast. A seller doesn't have to be anywhere near market value to get an offer. Buyers have no problem offering 20, 30, or even 50% below the listed price.

But here in the mellow Pacific Northwest it is much different. Homes need to be priced within 5-8% of market value in order to receive an offer. For close to twelve years I  have been helping clients buy and sell real estate and I still can't explain it....not completely. I do think it has something to do with how nice we all are here. When I ask buyers why they just won't make a offer when they think the property is worth significantly less they say, "I just don't want to offend anyone".  In my experience, most sellers and their agents would rather have an offer to work with, than nothing at all. Why? Because the start to any completed transaction is receiving an offer.

What do you do if the offer is so far below list price as to be unacceptable? What is the best way to respond?

Here's my advice:

Before you ignore any low offer consider that a proper counteroffer and solid negotiations could turn that low offer into a sale. And that is the goal, right?

So we know the name of the dance is 'Sell this house' - now what are the moves?

Check your emotions
A low purchase offer is not a personal affront - it means that someone wants to purchase your home. Unless the offer is ridiculously low, it deserves a response. Remain calm, do not take it personally, and discuss with your agent the many ways you can respond that will keep the other party engaged in the process.

Counter the offer
Unless you have multiple offers, the best response is to counter the low offer with the price and terms you are willing to accept. I encourage sellers to think about it this way - "what is the very lowest price you will accept to walk away from this home?" I call it the 'walk away price'.  Counter in the best faith and lay it all on the line. With a buyer who brings you such a low offer, there is a good chance they won't be going back and forth too many times. Buyers often offer a low price because they're nervous about overpaying or they simply want to test your limits. Push back but push back at the lowest price you are willing to sell.

Know that a counteroffer signals that you're willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as seller assistance with closing costs, or features such as kitchen appliances that make more sense for you to take with you, like a new washer and dryer, or perhaps those custom drapes in the living room.

Consider the terms
Price is paramount for most buyers and sellers, but it's not the only deal point. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, and the buyer is pre-approved for a mortgage. Consider what terms you might change in a counteroffer to make the deal work for both parties. Sometimes shortening closing saves you a mortgage payment. Or perhaps you need to stay longer? Changing the closing date may make the sale much smoother on you.

Review your comps
Ask your agent to prepare a list of recent comps. If these new comps are at lower prices, you may need to lower your list price to match them if you want to sell.

Consider the buyer's comps
Buyers sometimes attach comps to a low offer to showcase their position. Take a look at these comps. Are the homes similar to yours? If so, then your asking price might be unrealistic. If not, then ask your agent to attach 'your' comps to the counteroffer. This goes a long way in keeping the negotiations factual, not personal.

Listen to your agent
That's right! Chances are this is not their first rodeo (a phrase used by a client when describing me). Most experienced agents have negotiated their fair share of transactions and have seen all kinds of offers come together. Most agents worth their salt are deal makers. I have been told that I have put together some deals that seemed doomed at the start. So listen to what your agent is saying. If you need more concrete data than ask for it. But whatever you do, take some time to mull it all over, take your emotions out of the deal, and respond from an informed and educated position.

Until next week,

la chasse au bonheur

Wednesday, August 17, 2011

from sea to shining sea

Recent news of our nation's economic situation, congress, the stock market and of course, the real estate market, including the all time low mortgage rates, warrants a hard hitting post. But I just don't have it in me. It's still the lazy days of summer and a fluff piece seems more appropriate.

I have been working on my annual client appreciation calendar. Whether concentrating on entertaining ideas, gardens, interior or exterior spaces, this calendar is always a hit.

This year I wanted to showcase the varied styles of homes that dot our nation, from sea to shining sea. The following photos are homes that while are absolutely lovely, did not make the final cut for my 2012 calendar.

I hope you enjoy this short tour across our great nation and that it helps remind us that we are united under the red, white and blue.
January - A Cedar Home rings in the New Year in Utah
February - Winter in a Pueblo Style Home in New Mexico
March - A Cattle Ranch on the Rocky Mountain Front in Montana
April - Spring Break in Miami
May - Memorial Day in Maine
June - Summer in the City, Brooklyn Brownstones to be exact
 July - Happy Birthday America from a Federal Style home in Iowa
August - Mint Juleps on the Veranda of this Louisiana Antebellum 
September - Welcoming Fall in this California Bungalow
October - Vermont Farmhouse in Fall Foliage
November - Giving Thanks in an Oregon Farmhouse
December - Down for a long Winter's nap in Illinois
If you would like a 2012 Calendar just pop me an email and I will get one off to you this coming November.

Until next week,

la chasse au bonheur

Monday, August 1, 2011

Surf's up

Growing up in Lake Oswego, the beauty of the Oregon Coast was just a quick drive away. When I was young, our family took summer road trips whenever possible to this remarkable area. We spent endless days in surf and sand and nights in the modest beachside motels (virtually gone now) that flanked Route 101. 

Court Cottages, Seaside, Oregon
As I grew up so did the coastline. Child's play turned into long, romantic walks on the beach followed by weekend stays in charming inns that rival the world's most romantic getaways.  The sea, the ragged coastline, the wind swept trees are a big part of who I am. It is clear to say that the Oregon Coast runs through my veins.
Arch Cape Inn, Arch Cape, Oregon
It's no surprise then that I find myself back there. Not for me, but for my oldest daughter who has found a passion for surfing. As fate would have it, the stretch of coastline from Seaside to Manzanita is ideal for surfing!

Renee at 'The Cove/Avenue U', Seaside, Oregon
Renee watching the surf at 'Short Sands', Oswald West State Park, Oregon
 All this surfing, leaves lots of time to explore the string of quaint beach towns. 
Gearhart, Oregon
Loving the charm of a true cottage, I feel as if I have hit pay dirt. The younger version of me didn't appreciate the sweetness of these homes, rather I spent time dreaming of ice cream and boys. Now as I tool around the towns, up and down narrow lanes I relish in the sweet sights of these shingled beachside cottages.

It is no wonder I love these so, they're not too far off from the cottages I dream about in the UK.

I have always loved the look of the neutral Nantucket interiors. In fact, Pam Robinson, owner of Red Ticking, a store in Madison Valley, became a friend because of the countless hours I spent in her store. On my 'to do if I win the lottery' list is buy a beach house and have Pam appoint the interior with her incredible found objects and keen eye for all things perfect.

I did noticed a lot of 'for sale' signs during these past trips. It seems inventory levels are high right now at the coast. The economy appears to be putting a damper on vacation home ownership. With the high level of inventory in a corrected market, it seems that now might be the time to buy a cottage by the beach.

If you are considering buying a vacation property, here are some points to keep in mind. 

Location: Is it easily accessible or do you need to depend on a costly ferry or minimally maintained service road? Is it close enough to home that you can use it on weekends or is it just for longer stays a few times a year?

Looking ahead: Your family needs will change over time. You may face retirement or changes to your work situation. Teenagers may not want to spend time away from friends or may have work and school schedules that make family vacations harder. Could your children or extended family use the cabin without you there?

Financial factors: Beyond the initial expense of buying a vacation home, consider the ongoing maintenance, insurance, property taxes that you will need. If your plan is to rent the cabin out and offset some expenses, find out if rentals are permitted in that area. Then consider when you may wish to use it yourself. If you're there during peak times you will lose a portion of your rental income.  With a rental you will also have additional insurance and maintenance costs, and possibly property management costs. 

Vacation home ownership isn't for everyone. If it's not for you, consider renting a cottage by the week or month. There are plenty of management companies (big and small) who can ease this process.

And if that's not in the future, then how about pulling up a chair, pouring a Long Island Iced Tea and spending the afternoon lost in this month's Coastal Living magazine?  Just hang out this sign and exhale!

Here are some links that will help you explore the Oregon Coast. Lexie Hallahan is the owner and director of NW Women's Surf Camps and is an amazing teacher. I graduated High School with Lexie and have enjoyed catching up with her while she has been teaching my daughter to surf. Now I just need to get out there....next time! Enjoy the summer, wherever you may be. 

The town of Cannon Beach

Cannon Beach Vacation Rentals

NW Women's Surf Camps and Lessons

Cleanline Surf Shops, Seaside and Cannon Beach, Oregon

Until next time.

la chasse au bonheur