Saturday, August 22, 2009

Seller Beware!

I submitted an offer on behalf of my clients last week, for a small home in the North Central Area. The seller took approximately 4 days to respond. When he finally responded, he countered with a slightly higher price and changed the property condition terms to reflect that the property was being sold "as is".
To give you some background; this is a property that has been in the market for the past year. Several different Real Estate offices have listed this property but so far none have been able to sell it. Could it be the seller is set on the value of his property? The property is overpriced for the area, it's over 20 years old and although it's in fair condition, the garage was converted leaving you with a property that is no longer comparable with the area around it, what we call curable functional obsolescence. You also don't have a Private back yard, the home is part of a HOA that is comprised of about 20-30 homes that share a backyard and pool. This already makes it a hard sale..most homeowners want to have a private backyard that they can relax in, and share with their families and friends.
So going back to the offer, I have to ask my buyers to consider whether or not the enclosure of the garage and the lack of a private backyard, adds value to the property for them or not. As a Real Estate professional, I have to deduct value from the property because it has an enclosed garage and is lacking a private backyard, so instead of going with the square footage they're disclosing, I have to deduct the amount of square footage from the garage, giving me a much lower value than what the property is marketed at. I feel our offer was more than fair, and advised my buyers to stand firm...Homes in that area have sold for $30,000 less than what this property is advertised for, and the fact that it's been in the market for so long stigmatizes the property. When a property sits on the market for a long time, buyers assume there is something wrong with it, or that the seller is not negotiable on their sales price. So the seller has lost the ability to negotiate.
In this case, what killed the deal for my buyers was the fact that the seller wanted the buyers to accept the present condition of the property "as is" prior to inspections. This became a big concern for my buyers....they came to the conclusion that the property has probably been in the market this long because something major is wrong with it, and the fact that the seller won't consider negotiating repairs after inspections, told them that he was hiding known defects about the property that could be revealed during a home inspection.
This takes me back to my title for this blog..Seller beware, this is a buyer's market, if you don't want to sell under the current market conditions, take your property off the market and wait for the market to flip back to the Seller's side.

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