It’s pretty easy to come up with the Top 10 Tips for buying or selling a house. You should know those because other buyers and sellers just like you will be using them. However, the Top 10 don’t give you an advantage, those only level the playing field.
Buying or selling real estate always involves stress. It comes down to the should haves, could haves, and would haves. You can’t and shouldn’t try to fulfill every tip you come across about buying and selling real estate. Start with the obvious that will make all the difference in any deal. Such as being preapproved for a loan and having the down payment. After the obvious, pick and choose tips that best match your personality/style and the goal you are trying to achieve.
Tip #1 for buyers. Bid in odd increments. Have you ever been to an auction of collectable cars? The auctioneer usually asks the bidding to start in $10,000 increments. Three serious bidders quickly bid the price up starting at $10,000, then $20k, and then $30k, which is where the bidding stalls. After a moment of trying to get $40k, the auctioneer starts asking for smaller increments. Maybe $30,900 and then $30,750. But a savvy buyer can throw out any bid at any time. Before the auctioneer backs off $40,000, a bidder can offer $30,100. You can do the same thing when making house purchase offers. Instead of making $5,000 incremental bids, make $250, $500, or $100 incremental bids. Chances are good you’ll save a couple of thousand without being locked out during a bidding war. At the very least, your bid isn’t likely to match someone else’s.
Tip #2 for buyers. Avoid time limits for a response or make it a reasonable amount of time. A common buyer’s negotiation strategy is requiring a purchase offer response within 24 or 48 hours in hope of pressuring a seller to accept an offer before it expires. That usually only annoys sellers. Unless you have a good reason, let the seller think about it for several days without pressure. If the seller doesn’t accept it, chances are you’ll get a better counteroffer than if he/she counters while annoyed.
Tip #3 for sellers. On the flip side of buyers avoiding time limits are sellers that get too greedy. Say a full price offer comes in within a day or two of the property being listed. Sellers sometimes second-guess their good luck. These sellers assume that since a full price offer came in so fast that a bidding war is going to happen so they delay accepting the offer or decline it. Then two months go by before another serious offer comes in but that is for less than the first. The seller wastes time and effort waiting for a better offer that isn’t going to come. If a seller and his/her agent have done their homework, a quick sell at the fair market price is good for everyone.
Tip #4 for sellers. Consider the buyer’s price range when setting your price. Similar to buyers bidding in increments, sellers should price the home so that it appears within a buyer’s price range search. A buyer with a top price of $285,000 might set a price search parameter between $245,000 and $310,000. If a seller pushes the listing price up to $312,000 instead of $310,000, it will fall outside the high end of many buyers’ price range. That small price increment could mean a buyer doesn’t find the dream home that they are willing to make a no contingency offer for. The seller might get the $312,000 but pay $5,000 in contingencies. Or accept $307,000 after negotiations.
Tip #5 for sellers. Don’t make your initial listing just before most buyers take a break from looking at houses. This mostly happens the weeks before summer and winter holidays – Memorial Day, July 4, Labor Day, Thanksgiving, and Christmas. What happens is your listing ages while buyers are playing. When buyers get back from their break, your listing is older and buyers assume there is a good reason that it hasn’t received offers.
There will be other considerations specific to your location, price range, and circumstances. Your agent should be aware of these issues and you should seriously consider the professional advice they offer.
Please comment with your insider secrets. Our weekly Ask Brian column welcomes questions from readers of all experience levels with residential real estate. Please email your questions, inquiries, or article ideas to [email protected].
Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 12 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.