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Patricia Tan – Perspectives – International REAL Estate

Patricia Tan

Buying A Home in A Competitive Market

By Patricia Tan

Inventory of homes for sale in our area is very low. This means buyers will have fewer choices and may be involved in purchasing a home that has several people interested to buy. As a buyer, what can you do to ensure your offer to purchase will be successful?

When most people construct an offer, they think about the price they are willing to pay as their “offer”. In reality, an offer needs to be much more comprehensive in order for it to be given serious consideration by the seller. Understanding all of the seller’s motivations will help you structure a strong offer.

First, review everything that has been disclosed about the property so you know exactly what you are offering to purchase and its relative value. Disclosures will usually include the age and condition of the roof, air conditioning/heating systems and other key components, history of any problems and how they were resolved.

Your Realtor® should contact the listing agent before composing an offer, in order to understand what is important to the seller. While price is important, there may be other considerations from the seller’s perspective. For instance, they may want to remain in the home until a certain date. An offer from a buyer who can accommodate the seller’s needs may be looked upon more favorably.

When presenting a price to a seller, show the rationale behind the offered price. Your Realtor® should review sales of similar properties and establish the fair market value of the home today, based on comparable sales in the neighborhood. It is important to make a realistic offer in order for the seller to take you seriously. There is no rule of thumb as to how the offer price should be related to the asking price for a property, and each property must be considered on its own merits. Did the listing agent price it above, at, or below fair market price?

Your offer to purchase should be made in writing along with all relevant terms, including price, timing and amounts of escrow deposits, cash or mortgage, closing date, inspections to be carried out, responsibility for any repairs needed and any contingencies for the sale.

If you intend to purchase the property in a corporation or trust, but that entity has not yet been formed, the offer should include a clause allowing the buyer to assign the contract to a third party prior to closing. Be prepared to explain why this clause is in the offer, as it may make sellers nervous if they feel you are not fully committed, or plan to “flip” the contract to someone else before closing.

The offer should be submitted to the seller’s agent together with proof of your ability to purchase. If you are buying the property with cash, a bank statement or letter from your financial advisor confirming the availability of funds will be adequate. If you are making the purchase with a mortgage, you should have a letter from your lender showing that you are pre-approved for a mortgage for the relevant amount.

When the offer is transmitted to the seller, it should specify a period of time for the seller to consider the offer and respond. Timing of response can be key in a competitive market where multiple offers may be made to buy the same home.

Your agent should also “present” the offer to the seller’s agent appropriately. Offers are usually sent via email, but a covering note that gives the seller some background on the buyer may be appropriate, especially if the seller receives several offers.

When other buyers make offers to purchase the same property as you, this is known as a multiple offer situation and requires careful management by your agent. You may not get an opportunity to receive and make counter offers. A seller who is presented with multiple offers may choose to accept one of them, counter offer one of them, or respond to all buyers asking them to submit their “highest and best” offer for seller’s consideration. If this is definitely the “home for you”, I suggest you make a very strong initial offer to give yourself the best possible chance of securing the property.

As always, be guided by your real estate professional. An experienced, educated Realtor® can be the difference between success or failure in today’s competitive market.

patricia-tanPatricia Tan was born in England, and her career in international sales and marketing led her to live and work in many countries around the world before moving to Sarasota in 1997. Patricia is a Certified International Property Specialist (CIPS), Graduate Realtor Institute (GRI), and Transnational Referral Certified (TRC). She is involved in global activities of the Sarasota, Florida and National Association of Realtors, and currently serves as NAR President’s Liaison to U.K. Her real estate business operates from Coldwell Banker on St Armands Key, where her focus is to bring international buyers to the local market. She regularly makes marketing trips to Canada, Asia and Europe, to promote Florida’s Gulf Coast and the Sarasota area in particular. Patricia may be reached at 941-504-9232 or Pat@PatriciaTan.com.

Copyright © 2016 REAL Exclusive Magazine www.getrealexclusive.com
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