Ideas By Sky

What amount should I offer for the home I am interested in?

Your agent will give you this answer by running a report called CMA (Competitive Market Analysis). A CMA is an estimate of a home’s value based on recently sold, similar properties in the immediate area. The analysis considers the location, age, size, construction, style, condition, and other factors for the subject property and comparable. Your agent’s support will not end just by preparing and presenting you this comparison. You may take advantage of this report when making competitive offers which will cover below in detail.

Your agent will be your negotiator

The culmination of your and your agent’s efforts to buy a property or find a suitable purchase occurs when you and a seller form a legally binding sales contract. Most often this contract is agreement of sale, agreements installment contracts are also used. In any case, the contract states the specific rights and obligations to which both parties mutually agree.
Your agent will expedite negotiation of the contract. When acting as an agent for you, she will advocate and is obligated to negotiate the most favorable terms for that client. While your agent ultimately want to bring the parties on both sides of a contract to agreement, she must remember that the priority is to serve you. Mishandling confidential information or any other conduct that harms your bargaining position is a violation of the agent’s fiduciary obligations.
Your agent will be your biggest support since she will be negotiating on your behalf. You will understand soon that she will be able to separate roller coaster of emotions from the whole buying process since she will be able to advocate professionally and make sound decisions by removing herself from the fear of losing the home. Your agent should live up to the fiduciary duties promised to you, that is why she should make every imaginable effort to get you a better deal. Additionally, your agent will support you to write down the strongest offer letter possible, containing all the contingencies you need to shield yourself.

Proposing any variation from the terms of represents a rejection of the original offer and thus creates a new offer. This is known as a counteroffer. You may think about counteroffers like playing volleyball. The ball will jump back and forth until one person drops it. This game is almost always necessary if your agent and the listing agent has the best interest of their clients. Once you submit your offer, there are really only three ways which this can go: the seller can accept it, reject it (sometimes by simply ignoring it) or send a counteroffer

In most cases, the counter offer will include changes to one or more of the following items:

• Sale Price
• Closing date
• Contributions toward closing costs
• Contingencies requested by the buyer
• Earnest money deposit

I will be covering counteroffers in a separate blog post, so stay tuned!
Your agent may communicate the counteroffer via text, verbally, or a properly written counter offer. I suggest your agent to always write up your counter offer letter, and any further official communications with sellers. This will guarantee the fairness of the transaction while enduring all legal details. 

Each party has certain rights and duties to fulfill. The question of when an answer should come for an offer/ counter is an important factor. Many contracts call for a time by which the agreed-upon acts must be completely performed. Furthermore, many contracts provide that time is of the essence, which means that the contract must be performed within a specific time. 

A party who fails to perform on time is liable for breach of contract. If you get a counteroffer, and you really like the home, your agent must take action swiftly. Counteroffers come with expiration dates as we discussed and I must note some might be as little as 24 hours.

I would like to quote NAR (Copyright 2005 National Association of REALTORS® ) as this will give you the best information when asking questions about multiple counteroffers:

• In some situations sellers will have several competing purchase offers to consider. Sellers have several ways to deal with multiple offers. Sellers can accept the “best” offer; they can inform all potential purchasers that other offers are “on the table”; they can “counter” one offer while putting the other offers to the side awaiting a decision on the counter-offer; or they can “counter” one offer and reject the others.
• While the listing broker can offer suggestions and advice, decisions about how offers will be presented – and dealt with – are made by the seller – not by the listing broker.
• There are advantages and disadvantages to the various negotiating strategies you can employ in multiple offer negotiations. A low initial offer may result in buying the property you desire for less than the listed price – or it may result in another buyer’s higher offer being accepted. On the other hand, a full price offer may result in paying more than the seller might have required. In some cases there can be several full price offers competing for the seller’s attention – and acceptance.
• Your buyer-representative will explain the pros and cons of these (and possibly other) negotiating strategies. The decisions, however, are yours to make.
• Purchase offers generally aren’t confidential. In some cases sellers may make other buyers aware that your offer is in hand, or even disclose details about your offer to another buyer in hope of convincing that buyer to make a “better” offer. In some cases sellers will instruct their listing broker to disclose an offer to other buyers on their behalf.
• Listing brokers are required to follow lawful, ethical instructions from their clients in the same way that buyer-representatives must follow lawful, ethical instructions from their buyer-clients. While some REALTORS® may be reluctant to disclose terms of offers, even at the direction of their seller-clients, the Code of Ethics does not prohibit such disclosure. In some cases state law or real estate regulations may limit the ability of brokers to disclose the existence or terms of offers to third parties.

You may want to discuss with your buyer-representative the possibility of making your offer confidential, or of establishing a confidentiality agreement between yourself and the seller prior to commencing negotiations.

• Realize that as a represented buyer, your broker likely has other buyer-clients, some of whom may be interested in the same properties as you are. Ask your broker how offers and counter-offers will be presented and negotiated if more than one of her buyer-clients are trying to buy the same property.
• Appreciate that your buyer-representative’s advice is based on past experience and is no guarantee as to how any particular seller will act (or react) in a specific situation.