How to Make an offer on an Over Priced Nashville Home
One of the topics we hear a lot from Nashville home buyers here at NashvilleRealEstatetalk.com is “how do I make an offer” . Negotiating a successful offer and closing is one of the 3 primary abilities of any good Realtor. The other two being Marketing ( to sell your listing) and Networking ( to find special value homes when you’re looking to buy.)
Right now the spotlight is on making an offer because HOMES ARE OVER PRICED! Let me say that again, Nashville homes are Over Priced.
Why are they over priced?
Because most of the homes you want to buy, the ones with Great Schools, Open Floor plans , Granite Counters and the Latest Features, were built after 2003. Economists and Appraisers will tell you that Real Estate values today have returned to 2003 levels!
What does that mean?
It means that the person selling his 2003 or newer Mt. Juliet or Brentwood or Nashville home is looking at Zero Appreciation! In other words he may be bringing money to closing!
Whats more this condition will probably last until 2014. That’s the time frame when Nashville home prices are expected to catch up and begin appreciating again.
In the meantime the Average $170,000 Nashville home seller ( Nashville Average Home Price), will probably be bringing $5,000 to the table at a realistic price.
Unfortunately the average Nashville Home Buyer thinks that this is the perfect time to bludgeon the poor home seller. An offer 20% below asking price and $6,000 for closing costs is all too often the first offer. Which is usually met with “not no, but Hell No!”.
Home buyers frequently move on after being rebuffed by the home seller only to find later that an offer similar to theirs was accepted soon after their offer was rejected.
Usually the offer was not well thought out and often the Realtor’s advice was not taken. The result is a a lost opportunity. and sometimes the buyer’s second choice of a home is not as nice. A Lose Lose situation.
But it doesn’t have to happen that way.
The buyer and their Realtor can avoid this with a few simple rules.
1. What Kind of Seller is this?
2. What is the sellers pricing strategy?
3. What other inducements will the seller respond to?
Today lets look at number 1. What kind of Seller is this?
Okay, let’s suppose you’ve been house hunting at BNA.NashvilleHomeSearcher.com ( my shameless plug) and you’ve found the perfect house in Mt. Juliet or Brentwood.
We need to know what kind of Seller we have. My friend Joe Manusa in Tallahassee has studied this long and hard. According to Joe we can divide seller’s into 3 categories.
Wish Seller- This home seller does not have to sell. He is looking for a killer offer and if he’s in the right mood he might accept. Even if he gets his price and accepts though, he’ll likely make the sale contingent on him finding an incredible buy on another home. BTW- He’ll probably want 3-5 days after closing to move all his stuff out of the house.
And if you meet his price and conditions he will suspect he has “undersold himself” and will try at each phase of the sale to make you withdraw your offer.
Unless you are madly in love with this house and have the patience of Job, move on. It’s not likely to work out with this seller and rarely is the price fair or the experience anything but excruciating.
Would like to Sell-This is the largest category for Nashville home sellers. Although plenty of Mt. Juliet home sellers and Brentwood home sellers also are in this group.
This home seller would like to sell but for many reasons his price is on the high side. He usually has “padded” his price to allow for “negotiating room”. His biggest mistake is that he believes he has plenty of time can come down on his price if he needs to.
Unfortunately he is behind the price curve and as the buying season wanes ( April to November in Nashville is the Home buying season), and prices move lower he is out of step. This is especially true as I write this in December and home showing for Nashville are in decline.
This seller always begins the listing process by saying “I need $ _______ out of this house.” Instead of what he should be asking which is ‘What is the market price for this house today?”.
We sometimes are able to bring this seller back to reality by providing him with a market snap-shot for his neighborhood included with the offer. It’s also important to research the sales history and get an idea what if anything the seller will make or lose on the house if he accepts your offer.
Needs to Sell-This is the Nashville home seller you are looking for. He is being relocated or even downsized he may be experiencing a life changing event such as children or marriage and must find a buyer for his Mt. Juliet or Brentwood home for sale. Negotiating with this buyer can be very straight forward. he may even see the wisdom of losing a little on his present Nashville home in order to get a great deal on his next home in Brentwood.
In our next posting we’ll look at the Nashville Home sellers pricing strategy, we’ll break down the clues that help us to identify what areas may be open to negotiation. You’d be surprised at how often a Brentwood home seller will fight over $1,000 in price but concede a $1500 Stainless Refrigerator in a nano- second.
Until then, get out and look at homes with these incredible once in a life time interest rates. find a home in a great Nashville neighborhood and enjoy the negotiating. Ya’ gotta love it.