Buyers beware! Are builder incentives or seller concessions worth it?
It’s easy to get excited about incentives or concessions from the seller. Your first thought, “how much will that save me?”, but does your excitement over the savings feel like fools gold? Let’s explore and see if those deals are really worth it.
If you’re in the market for a brand new home, most likely the builder will offer you many different incentives to choose from so long as you use their lender and title companies. These incentives range from paying closing costs, paying the first years HOA fees, an appliance package or even a bonus room add on. But if you’re like me, you’re wondering, why are they just giving things away?
Builders will give incentives as a sales tactic to encourage you to make an offer on a home now. Typically you will find incentives given at various times throughout their build process. Most likely, you will see the best incentives given during the pre-sale round and again at the end of the sale cycle when there may only be a few homes left to sell out the community.
However, be smart. Don’t let your excitement get the better of you. Find out if they will increase the price of the home if you choose one of those incentive packages. Also, keep in mind that an extra bonus room add-on sounds wonderful but it will cost you more in property tax for the additional square footage.
If you’re house hunting for an existing home, make sure you discuss with your Realtor® if it is a buyer’s or seller’s market. This knowledge will give you the upper hand when figuring out if the seller’s concessions are a good deal or a red flag.
Typically a seller will give concessions if the home has a funky layout, if it’s located in an undesirable area, if there are known problems or if it is a buyers market and they want to woo you away from another home sale. If this is the case, you could wind up saving a good chunk of change by negotiating to have the seller pay your closing costs or Hoa fees. This will help reduce the amount of money that you need to bring to the closing table.
Remember that your lender will need to know how much the seller will contribute to your closing costs since they are only allowed to give so much according to your lenders rules.
When you work with professionals that are knowledgeable about the market they serve and the buying/selling process, you can be confident that you are in good hands and leave yourself free of worry.
If you found this information helpful please share it by tweeting it or posting it on Facebook. You can also reach out to me for more tips on how to buy a home in Los Angeles by email Laura@LauraTsellsRE.com or text (310) 919-8375. Happy house hunting!
Would you like to know how to turn the secret behind these stats into a great deal on a home sale? How can you use this information as a home seller to turn these stats into cold hard cash? You start by tailoring your marketing strategy to fit the demands of the buyers. So, how do you do that? Your first step should be to talk to a local Realtor and pick their brain about their strategy to help you get your house sold with a favorable outcome to you.
Consider the needs of the buying group that is looking in your area. You can do this by checking out the most recently sold homes in your neighborhood and find out what it is about those homes that caused the buyer to buy. Once you discover what they are looking for you can then transform your home to be most desirable to them. For example, small renovations can add a lot to the bottom dollar when it’s done right, and they don’t need to be expensive.
Paint colors that have proven to sell a home faster could be a very inexpensive and easy way to spruce up your home. Curb appeal is another good option since you only get one chance to make a first impression. Another great improvement that shouldn’t break your bank is new kitchen appliances, counter tops, or new bathroom vanity and mirror. And lastly, don’t forget the lighting! Great lighting can set the mood for a beautiful looking home that makes the buyer feel at home when they walk in the door.
Keep in mind that doing inexpensive renovations doesn’t mean do it cheaply. Buyers are smart and will not pay top dollar if they believe they will have to redo the renovation. Save yourself the heartache. Do it right from the start or don’t do it at all!
If you’d like more details based on your home and neighborhood, you can connect with me at Laura@LauraTsellsRE.com
HERE ARE MY TOP 3 TIPS TO STRATEGICALLY PUT YOU IN A BETTER POSITION TO GET YOUR OFFER ACCEPTED.
Buying a home can feel like a daunting task, especially if you’ve been at it for a while. For those of you that live in Los Angeles, you know exactly what I’m talking about. On average, a three bedroom, two bath home will cost you about a million bucks, depending on the neighborhood. And, if you’re lucky, it only needs a little fixing up. However, most of us will agree that when you find a home that meets your budget and needs the open house is flooded with dozens of prospective buyers. Ugh! Your brain screams out, “NOT AGAIN”! Your heart sinks, because you know this means – “Let the bidding war begin”.
You tell yourself, “I’m so tired of this”and you contemplate if you should even make an offer. Sound familiar? If you feel this way, you’re not alone.
So, how can you approach your next offer differently to strategically put yourself in a better position to have your offer accepted?
Over the past decade that I have been in real estate, I have worked with many clients that have been in this exact situation and what makes the difference is what I’m about to tell you next.
Most buyers and their agents are only thinking about price when it comes to making a strong offer, but what if raising your offer price isn’t an option for you? Here are my top 3 tips to help you strategically put yourself in the best possible position to get your offer accepted.
- Consider house hunting during October, November, December & even January. Why? Because most buyers are in holiday mode. You will find that only serious buyers are looking during holiday time and therefore, you have less competition. And, with less competition, your odds will increase significantly.
- Make your offer attractive to the seller. What do I mean by that? Consider paying for some customary seller items. For example, the city occupancy report, required retrofit items for the home (smoke detectors, carbon monoxide detectors etc.) or city transfer taxes. If it’s a condominium, consider paying for the HOA document preparation and transfer fees. Most of these items don’t cost that much and by eliminating the responsibility from the seller it will make your offer stand out from the others.
- Be aggressive with contingencies and time periods. Contingencies have a state standard time period built into the contract, but those can easily be changed. Consider changing your inspection contingency time frame from 17 days down to 8 or 10 days. And, if you are up against a cash offer, consider writing your offer without an appraisal contingency. Yes, I know this is risky, however, working with a great Realtor that can support the price you are offering with market data, should ease your mind and let you know that you are in the value ballpark. In addition, make sure that your lender can get the appraisal done within your 8 or 10 day time period so that if it doesn’t come in at value, you can use your inspection contingency to back out of the deal without losing anything.
These tactics have worked well for my clients over the last few years. Most recently, I was able to help a client get their offer accept over multiple other offers when the house fell out of escrow with its first buyer. We wrote an offer with a 30 day free rent back to the seller (their new purchase wasn’t going to close at the same time their sale would) and offered a quick 2 week close, a 5 day inspection time frame and we did not ask for repairs of credits. In addition, I was also able to negotiate a reduced price by $50,000 bringing the total purchase price down from $1,149,000 to $1,100,000! This price reduction was asked for but NOT given to the first buyer because their terms and negotiation tactics were not favorable to the seller (according to the list agent).
With more buyers out looking for homes to purchase than there are houses for sale in Los Angeles, you need to really be aggressive with your strategy. Make sure you and your Realtor are on the same page when it comes to a house hunting strategy. When interviewing a Realtor ask the question, “what is your buying strategy for your clients?” before signing on to work with them. This will give you a good idea if they are the right fit for you to work with.
For more information and photos of the above home sale mentioned click Laura’s Sold Properties to view all details.
Please let me know if you found this post helpful by commenting below. You can also reach out to me for more tips on how to buy a home in Los Angeles on my website www.LauraTsellsre.com or text me (310) 919-8375. Happy house hunting!
TOP 10 CITIES FOR REAL ESTATE INVESTING
Thinking about investing in real estate? Here are the top 10 cities where you will get the best bang for your buck. So, now that you know which city will bring you the most ROI, what makes these cities so attractive and others not? Let’s take a look to see what these cities have in common to find out.
Upon further investigation, the commonality you will see is a healthy local economy, job growth, an increase in population and an affordable home purchase price to those with a middle class income.
Let’s take a look at #1 on the list – Dallas, Texas. Dallas has housing affordability within reach for most middle class income earners because their values are below market in the greater Dallas-Fort Worth area by about 20%. They also have a projected increase in real estate values of 29% over the next 3 years, according to Local Market Monitor.
This makes Dallas a relatively low risk investment opportunity. Couple that with the fact that Dallas has a strong local economy and corporate companies with growing job opportunities that bring employees into the city from many other parts the country and you have a recipe that is inviting to investors.
This increase in population creates a large pool of landlord/renter possibilities and with the cost of living in line with wages, landlords can feel confident about a cash-flow upside.
To contact or connect with me, feel free to reach out to my websitewww.LauraTsellsRE.com or leave a comment below.
How important is curb appeal?
When you consider the phrase, “you never get a second chance to make a first impression”, I would say it’s hugely important.
Curb appeal is your first impression as a home seller and you want it to be a good one. When a buyer pulls up in front of your house, the judging starts whether you like it or not, so don’t give them any reason to drive on.
Just as we judge other people (don’t be coy, you know you’ve done it) buyers are judging your house from the second they drive up. Instantly their mind subliminally runs through a laundry list of questions that could sound something like this.
- Is the front of the house well groomed?
- Is the lawn manicured?
- Does this house look inviting or like it’s Halloween all year round?
- Do I want to call this house home?
Here are five inexpensive tips to help you keep your house looking it’s best.
- Get a new front door, or freshly paint the one you have and put on new hardware.
- Manicure the lawn and flower beds, (where possible plant small flowers or succulents to create symmetry for the eye).
- Make sure all outdoor lighting works. (serious buyers will drive by at different times of day/night.)
- If your garage door is at the front of your house make sure it looks clean
- Clear spider webs from front door entry and front window areas.
Showcasing that you care enough about what visitors think about your home will prove to go along way. These small tips will help to maximize your homes curb appeal and make buyers feel welcome. Now all you have to do is sit back and enjoy the view!
If you’d like more information or just want to connect with me you can find me at http://LauraTsellsRE.com.
SHOULD YOU WORK WITH MORE THAN ONE REALTOR?
The answer is NO.
Day after day, I see a lot of home buyer’s work with many different agents because they seem to think it will be beneficial to them. In reality, it’s the exact opposite.
My experience tells me the reason a buyer will work with more than one realtor is because they aren’t getting the service or information they need from that particular person, and therefore they continue to seek for someone who understands their needs and is knowledgeable beyond showing a home.
If you find yourself in this quandary, here are 2 questions you can ask the next realtor you consider doing business with to determine if they are the right agent for you.
- What’s your buying strategy when working with clients? Or, what can I expect from you other than home showings?
- How will you help me determine what house is right for me?
If you are left with a blank stare, it’s time to move on. But don’t be discouraged. A great real estate agent is worth their weight in gold, and like seeking gold you’ll have to sift through a lot of dirt before you find that rare and valuable piece.
The answers to the above questions should be satisfying and give valuable insight you know comes from experience. Spend the time and get to know one another, and really determine if you are the right fit to work together. Keep in mind that this meeting will be the longest amount of time you will spend together through out your search process, so make it count. The more time you spend on this initial meeting the easier and more streamlined your search process will be.
If you have other questions you’d like answered, feel free to connect with me by commenting below or contact me at LauraTsellsRE.com.