Over the past month or so, a question that's come up quite a lot in negotiations is what does an "As Is" contract mean when it's applied to real estate?
When an offer is written on an "As Is" contract the buyer still has the right to do an inspection and isn't necessarily giving up the right to ask for a credit, or for work to be done if an issue arises.
However what is true from a seller's perspective is that if you have accepted an offer on that basis you are not obligated to do anything if something comes up in the inspection.
You essentially have options.
One option is to simply say "no" if a buyer makes a request in the inspection period and perhaps asks for a credit. You can respond by saying that the contract is "As Is" and the buyer needs to continue to proceed with the purchase.
The second option is that you can accept that the request is a reasonable one and do the work or provide the buyer with some sort of credit.
The third potential outcome is that you can negotiate. If, for instance, the buyer tells you that there is a leak in the roof and termites have been discovered and demands a $5000 credit, you can respond by saying you are prepared to offer, say, a $2000 credit.
So why do buyers even consider making an "As Is" offer? From their perspective, making an offer on an "As Is" contract structures things in such a way that the seller is more likely to accept an otherwise identical offer.
I hope that clears things up, if you were in any doubt.
Please reach out to us today if you have any further questions and, as always, we're happy to assist you in any way to help you get the result you want in the right timeframe. .
Real Estate Information
Displaying blog entries 1-10 of 86
Over the past month or so, a question that's come up quite a lot in negotiations is what does an "As Is" contract mean when it's applied to real estate?
It's really quite incredible that we're already calling half-time on this year. Perhaps the reason it appears to have gone so fast is because we've enjoyed a very busy time.
Now approaching multi-year lows, mortgage rates have been a key driver for many buyers in this market so far in 2016. Experts were predicting a gradual rise in rates during this year to between 4.5% and 4.65%, but instead they have progressively moved south, with rates around 3.6% commonly available for a 30 year home loan. That represents a fantastic opportunity to lock in a low rate.
While nothing is guaranteed, there has even been speculation that a cocktail of disappointing economic news at home and continued financial uncertainties around the globe could send mortgage rates even lower.
Predicting the future direction of rates is a notoriously difficult task, as last winter's wildly incorrect expert forecasts proved, but what's undeniable is that buyer sentiment and demand in certain sectors is very high at present and sellers should recognize the tremendous opportunities for good returns that exist right now, rather than gambling on bigger returns later.
We've seen something of a split personality market locally, especially in terms of inventory of available homes for sale. While single-family residential homes at or below $425,000 have been in very heavy demand, inventory at the higher price points above $600,000 has been growing, due to less robust demand in that sector. The current affordability of home loans has unquestionably, and understandably, been a bigger motivation at the lower price points.
Moving forward, it's interesting that residential resales are at their highest level since 2007 and net worth in America is back up to 2007 levels, signaling that asset prices have gone up (stocks and real estate). However production GDP has not. This signals inflated asset prices. Also, I am noticing major banks bypassing FHA and offering out their own mortgage products, where buyers can put only 3% down for a mortgage.
It will be interesting to see how things shake out over the next six months. As I hinted earlier, I'm already seeing shifts in the market in certain price points where inventory is climbing and sales are slowing down. Prices are being pushed in a downward fashion in those sectors.
As ever, please contact us to discuss your best options moving forward.
Today I want to touch on a subject that comes up a lot at this time of the year - making a decision to continue to rent a property or to explore the option of selling it.
A lot of leases come up at this time of year and I get a lot of questions from sellers asking me whether it makes sense to sell or to continue to rent.
I believe that there are a few things to consider here.
The first thing to look at is the macro-economic environment. The average amount of residential resales appears to be peaking and is at its second highest ever level. I also saw a statistic recently that credit card debt of US consumers is at its second highest ever level as well. Coincidentally the highest level for both was 2007 and we all know what happened after that...
So if you're not interested in renting for an extended period of time, these stats might help to convince you that it makes a lot of sense to cash out and sell the property.
The two other important considerations are questions that sellers need to ask themselves.
Firstly, if someone was to offer your property with its current cashflow and situation, would you buy it today at the current market price? If the answer is no, then the logical, rational decision is to sell the property, because if you're not a willing buyer of that asset on that basis you technically should be a seller.
Another helpful question you can ask yourself is if someone asked your advice on a property deal and given the individual circumstances, would you advise that person to hold onto it or cash out and sell? It's often easier to eliminate the emotion of the decision by artificially extracting yourself from the equation.
I hope these thoughts are helpful to you in making a logical decision. If you have any questions or concerns or would like to know the current value of your property and whether or not it makes sense to sell or continue to rent, don't hesitate to reach out to us today.
You may have observed that a "For Sale by Owner" sign in front of a house often eventually changes to one representing a professional real estate agent.
The reason for this is that most “DIY” sellers quickly discover that selling and marketing their home is a far more multifaceted and highly skilled process than they anticipated.
Here are just some of the key benefits that top producing agents bring to the sale:
Maximum exposure for your home - Only a realtor can reach the widest range of potential buyers, through access to the local MLS service that effectively transmits information about your property on a worldwide level. Generic home search websites, and indeed other local realtor sites, all derive information about a home from what's called the IDX feed generated by MLS listings.
Expertise in marketing - A realtor is an expert at marketing homes, knowing exactly what to highlight when listing or describing a property to potential buyers. This can be a quite sophisticated process, as different areas and price levels require their own tailored approach. Furthermore, the right realtor will run a thriving, professional website, adding value by blogging useful information to buyers and sellers and promoting homes through the various social networking platforms.
Access to buyer's agents - Listing your home through an agent facilitates distribution of your home information to all active buyer's agents in the area who are likely to have a waiting list of potential buyers looking for a home just like yours!
Access to a wide range of relevant contacts - The best realtors will aggressively market property, directly prospecting to neighbors and staying in regular contact with past clients and others who can influence the sale of homes. Even if not interested themselves, contacts may be aware of friends of relatives for whom your home is the perfect fit.
Achieving the Very Best Price for Your Home - Using an attractive price is a strategy that will ultimately net the seller the most amount of money possible. When you position a property well, price-wise, it can make the difference between receiving showings and no offers and receiving multiple offers. With all the information available on the internet, it can be difficult to obtain realistic picture of value.
When it comes to achieving top dollar, your agent uses local knowledge of recent actual sold prices and uses a range of negotiating tactics to ensure that you get the very best overall deal.
Experience in Closing the Sale - A home purchase or sale generates a lot of paperwork. There are many opportunities for costly errors if you embark on a process in which you probably have zero experience. As realtors deal with closing all the time, they know all the pitfalls and will therefore be looking out for them on your behalf.
These are just a few great reasons why agents offer significant advantages over the "DIY" approach. Why not contact us today and discover the extra steps we take to ensure that your property sale is a smooth and rewarding process.
Today I'd like to talk to you about expired listings.
An expired listing is when a home is put on the market and after months comes off the market unsold. There is usually a time frame to the agreement and when that expires the home then comes off the multiple listing service and is no longer active on the market for sale.
About 20% of our clients come to us after their home listing has expired. Therefore I thought it would be useful to go over some of the reasons why a home expires.
The first reason is, quite simply, that the sellers change their minds. Whatever was prompting them to move has changed and they are no longer interested in selling. This is perfectly fine. My job as an agent is to help people sell, it's never to talk them into selling.
The second reason why a home comes off the market unsold has to do with the agent the seller initially hired. Just 5% of agents do 95% of all sales!
What usually happens when a seller has listed their home and it hasn't sold and they reach out for me to help them, is that they hired someone who was maybe a referral from a friend, or was simply someone they knew and/or was based in their neighborhood and essentially didn't get good service. Typically the agent wasn't candid and up front with them about what it would take to sell the property, wasn't calling the seller on a regular basis to discuss why the home wasn't selling and, as often happens, took low quality pictures of the home with their phone rather than hiring a professional.
Whatever the specific reasons, invariably the agent has ultimately fallen asleep at the wheel and the home goes unsold, which is unfortunate as it ends up affecting sellers and their plans.
The next reason is the condition of the property - what it looks like overall and what the showing condition is. That can certainly influence things.
The final reason why a home doesn't sell has to do with the price. Ultimately what something's worth is what someone is willing to pay for it.
When sellers with expired homes come to us, we aim to get these four factors back in alignment. We talk to sellers about whether they still actually want to sell and, if they do, based on our track record there's a very good chance we can help them. Then we have a conversation with regard to the overall condition of the property and the price.
On average, we can help people to get the home sold in 30 to 45 days, even though they may have listed with another agent for six months or more, or even unsuccessfully hired more than one agent.
If you find yourself in this position, or know someone who is, or have a home that has been on the market for some time and is about to expire, feel free to contact us today. We're supremely confident that we can help you.
We have just completed the first quarter and the market place has continued to be strong in specific pockets.
Due to artificially low interest rates, single-family residential properties in certain price points ($450,000 and below) are in very high demand.
In the higher price points ($600,000 and above) the inventory is growing and demand is not as strong.
The condo segment of the market is the place where I have seen the most change. The inventory has grown dramatically in the last 12 months and as it sits now, if no one put a new condo on the market, it would take eight months to sell all the ones currently listed. There are also many new-construction condo projects going up, as I am sure you have seen with all the cranes in the sky.
All in all, the quarter was great for the market and great for The Novello Group. We had the good fortune of helping 61 people in the first quarter buy or sell a home.
We look forward to the opportunity to be of assistance to you and yours. Should you have any questions, please feel free to contact us.
In South East Florida we have a large elderly population, so a lot of our clients find themselves needing to sell property when a family member passes away.
This can be a challenging experience for two main reasons.
There is obviously the emotional component, which we are obviously very sensitive to. Then there's the practical component which can be extremely overwhelming, particularly if clients aren't based locally.
There are four key steps in this complex process:
Probate - This requires the family to hire a local attorney. This is helpful because local attorneys are more familiar with the county that the family member lived in and/or where the property is located. In our experience this can help to dramatically expedite things.
Dealing with contents (tangible personal property) - Having a local area agent who is very familiar with these types of transactions can be very helpful as that person can connect you with licensed, bonded and insured professional vendors who can help with contents, perhaps arranging an estate sale for items of value or clearing out property and donating to local charities or carrying out some handywork to prepare the home for sale and maximizing value.
Deciding what to do with the property - There are usually some clear options here. Sometimes the decision will be to keep the property in the family. Another choice is to rent the home out. The other normal option is to sell the property. We often find that in these dynamics that family members get solicitations from neighbors and investor types whose intention is to purchase at a discount and make a fast profit. They will typically make an offer 20-30% below fair market value. If the goal and objective is to sell and if there has already been some interest, listing the house for sale on the open market forces everyone to compete and will attract much wider interest. This often results in multiple offers.
Selecting a real estate agent - If the decision is to sell the home, it's critical that the agent you choose has a vast knowledge and experience of the legal aspects of probate. This ensures that they can help to efficiently guide you through the process and work in tandem with the appointed probate attorney to ensure everything goes through smoothly and efficiently, because this type of transaction is a little different in terms of closing and all the appropriate documentation that's required.
We have had the good fortune to have helped a lot of families in these circumstances. If you are in this situation and would like to sell a property, we would be delighted to assist. Our intention is to take the weight off your shoulders at a difficult time and put it onto ours.
Please don't hesitate to contact us today if you have any queries or concerns in this area.
On the face of it, the sooner your home sells for the right price, the better.
That being said, receiving an offer only a few days after a property has been listed often creates uncertainties in the minds of sellers. With such a buoyant market at present, this is an increasingly common situation.
Quick offers can cause a real dilemma for sellers, especially those who aren't entirely focused on the need for a very fast sale.
Because the home has sold so rapidly, there's often a nagging suspicion that maybe there are better offers out there and sometimes sellers will decide to wait and see if they get anything better.
This is, of course, a high risk strategy. One of the key reasons buyers are so enthusiastic at the moment is because they want to find the right property as soon as they can and lock in an ultra-low mortgage rate. But that is a scenario that could quite quickly change.
Whereas you may think that patience will be rewarded, it's extremely unlikely that the person(s) who made you a quick offer will have the same mindset.
I jokingly tell people there are two times in our relationship that they may be upset with me. The first is if the property sells too quickly and the second is if it takes too long to sell.
When a seller expresses the wish to keep the home on the market after an early first offer, there are two things that I cannot predict with a high level of confidence:
- How long might it take to receive another offer?
- Will the next offer be better than the first one?
My suggestion to clients is to always take a very serious and close look at all offers, irrespective of how soon they arrive. We will have priced your home so that you have the maximum opportunity to get the very best return on the sale, so using that asking price as a measure, you can instantly gauge the quality of each and every offer.
Of course we do not leave you alone in this process and will talk through every offer in detail with you and express our thoughts as to its quality, based on our deep experience of current and historic market trends.
Take a look at the Zillow review in the sidebar of this message for a great example of how we recently handled a very quick sale to the complete satisfaction of the client.
We'd be delighted to provide you with further assistance and advice on any aspect of selling your home, so please don't hesitate to contact us today.
I take a lot of calls from clients who have hired another agent to sell their home and aren't getting the results they need and would like me to help them.
When they take a close look at their existing listing agreement with their current agent they often find that there are things in there that they weren't aware of.
One of these is a cancellation fee. Some agents will put a clause in the agreement that means there is a fee you have to pay them if they let you out of the time frame of the agreement.
In a six month agreement, for example, you might call the agent to cancel at the end of 90 days because you aren't happy with service and progress to date. Because you signed the agreement, the agent is then able charge you a certain amount of money, which might typically be $500 or $1000. In one case, I've actually seen it be as much as 1% of the list price...
If you're not careful, getting out of an agreement can be really costly, so it's something to watch out for and ask about during the realtor selection process.
You should also pay close attention to the actual time frame of the agreement. Some listing agreements are for six months, some are for a year, but in my experience if a home isn't selling in 60 to 90 days there is something wrong somewhere - usually the condition of the property and/or the asking price.
It really doesn't take much time to determine what the issues are if you are getting good feedback from your agent, including calls on a weekly basis and emails to let you know what's going on, what the traffic has been and what people are saying etc.
Here at The Novello Group we really believe that we only deserve to be compensated when we actually deliver a result. So if you feel we're not doing our job, you are free to cancel the listing agreement unconditionally, at any stage at no charge. That's how confident I am that we can give you great service.
As you can see, it really is crucial that you take great care to know what you are committing yourself to before signing up with an agent.
I hope this has been useful to you. If you are in the process of selecting an agent, we'd love to have the opportunity to be interviewed for the job.
As always, please don't hesitate to contact us if we can assist you in any way.
A picture is worth a thousand words" may be a very familiar saying, but it absolutely applies in real estate.
Today more than ever, high quality professional photography is a critical element in the marketing of your home.
To use another well-worn phrase: "you never get a second chance to make a first impression". These days the images that accompany the online listing of your home are usually the first thing potential buyers notice.
And yet too many homes are still shown with images that are out of focus and/or poorly composed/lit. A failure to initially impress is, of course, totally counterproductive to your goal of selling your home as fast as possible and for the best price.
Poorly presented images inevitably result in fewer viewings, hampering your chances of optimizing the financial outcome and speed of the sale.
Any set of photographs of a home should tell the story of that property - how well the rooms are appointed, the key visual features and, above all, providing enough positive pictorial evidence to ensure that your home is certain to be on buyers' viewing shortlists.
In this age of the smartphone, it's perhaps too easy for some agents to quickly take a few images and upload them to their websites. Almost invariably, however, such pictures will be poorly composed, badly lit and a simply inferior representation of your home.
Here at the Novello Group we ensure that your listed property looks as good as it possibly can, by using professional photography to do it full justice. The end result can be seen below in the high number of homes we consistently sell each month.
Why not contact us today to find out more.