You found the house or condo of your dreams, you make an offer and, sadly, the sellers refuse your offer! How disappointing!! Not even a counter offer! Why would this happen?
Buying a home seems pretty easy…. look for what you want, visit a few homes, find the right place, make an offer, have it accepted and BOOM, it’s yours.
Not so easy…
Many factors affect the sold price of a property. The proper way of determining a selling price is to have a qualified real estate broker do the research of recent sales of comparable properties in order to determine a potential selling price. Easy enough. But sometimes it’s not black and white.
Issues Facing Real Estate Buyers Today:
1. Sellers want too much for their property – Often enough, we come across properties that are over priced. Sellers either wrongly think their property is worth more than it is, they need the money, so they can’t afford to lower the price, or they want to skim the market, meaning that they are only willing to sell if they get their price. Real Estate brokers can educate these sellers as to the true market value of their property but the sellers in these cases are influenced by other factors and don’t care about true market price. These Sellers often do not sell and “burn” their property.
2. Uneducated Brokers – I love this one. Brokers often suger coat the potential price of properties in order to get the listing. When comparing properties that have sold, they will pick and choose which ones to compare to, in order to inflate the price to the Sellers. Danger: The danger in doing this, is that sellers will have an unrealistic idea of what they can obtain. Case in point: I recently made an offer with a buyer. We gave a reasonable offer based on recent sales. The Real Estate Broker representing the Seller yelled at me, telling me the offer was too low. I asked him if he had looked at comparables. He had! But he was looking at sales over the last 24 months!! If he had properly analyzed the market, he would have seen a steady decline in the prices of the condos in this specific building. The most recent sales of the last 6 months were crystal clear. Unfortunately, he promised his client, the Seller, a certain price, which is completely inconsistent with today’s prices. The Seller will miss an opportunity to sell, my Buyer has other opportunities.
3. Trying to get a good deal – Some Buyers today will look at properties that they cannot afford, will make a low-ball offer and hope for the best. What often happens is disappointment. More often than not, if Sellers are priced well, they will not entertain an offer that is well below market evaluation. In some rare cases, the Buyers will come out winners, by scoring a really great deal, but special circumstances prevail.
4. Multiple Offers – If buyers find themselves in a bidding war, no matter how amazing their offer is, they risk getting a rejected offer because another offer might be just as great as theirs but with extra perks. For example, 2 buyers make the same offer price-wise. But one needs a mortgage and the other will do a cash purchase (no tying down the property while waiting for mortgage approval) and maybe will even forego the inspection and want a quick closing date. So although both offers have the same cash value, one is more attractive to the seller because it will be quicker. Please note, you should ALWAYS have an inspection done. No matter what.
Turning REFUSED into ACCEPTED:
1. Time the market. If you are looking for a deal or negotiating with an unreasonable person, take a look at when the property was listed. If the property was newly listed, the chances of negotiating a low price will be low. Try, but if it doesn’t work out, wait a while and try again. But beware! You risk losing the property to another buyer willing to pay a higher price right away.
2. Use a qualified broker to represent you. Real EstateSellers hire a Broker to represent them in the sale. This broker will defend the Seller’s needs. Who will defend yours if you go directly to the Seller’s Broker? Hiring your own Broker to defend your needs is always recommended. Would you go into a court of law using the opponent’s lawyer? Nope!
3. Re-evaluate the price you offered. If your offer was rejected, re-evaluate it. Are you offering a fair price? Can you afford to increase your price? Often, re-evaluating what you are prepared to pay and what you can afford will turn an unfavorable situation into a win-win situation for both Buyers and Sellers.
4. If you are a Seller. Make sure the Broker who is representing you is giving you all the facts and not sugar-coating the truth about your property.
Whatever the situation, there is always a solution. Ensure that you are fully informed and working with a qualified Real Estate Broker.
Monique Assouline is an award-winning Real Estate Broker working all over Montreal since 2005. For a free market evaluation, contact her by email at firstname.lastname@example.org or by phone at 514.219.5897.