Buyer Resources - Articles

Buying Property - Making an Offer

Can You Buy Property Below Market Value?
While a typical Buyer may look at five to ten homes before making an offer, an Investor usually goes through many more. It takes a lot of determination and perseverance to find a real bargain.  There are a number of ways to create value in property. Purchase:

  • Property that needs repairs in a transitional neighborhood
  • A Foreclosure on the Courthouse steps (Requires Caution and Investigation)
  • A building that is due to be torn down and move it to a lot you own
  • The "leftover" house in a new housing development
  • What Is The Difference Between List and Sales Prices?
    The list price is a Seller's advertised price, a figure they would like to realize for the property. Sellers may price property high, low or close to what they hope to receive for the property.  To determine whether the list price is at market value The Real Estate Team will us a Comparative Market Analysis (CMA).

    What Is The Difference Between List Price, Sales Price and Appraised Value?
    The list price is the price that a Seller would like to realize for the sale of the property.  Sometimes properties will sell over, at, or below the list price depending on market conditions.  Sellers may price high, low or close to what they hope to get. The Real Estate Team will provide a Comparative Price Analysis (CMA) to assist in evaluating the correct price to offer.  The sales price is the amount the Seller receives for the property.  The appraised value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors at a given time.

    Is A Low Offer A Good Idea?
    While a low offer in a normal market might be rejected immediately, in a Buyer's market a motivated Seller will either accept or make a counteroffer. Full-price offers are more likely to be accepted by the Seller. However, there are other considerations involved:
  • Contingencies - i.e. sale of Buyer's property, loan, condition of property
  • Are repairs being requested
  • An all cash offer with a short escrow period of time

What Contingencies Should Be Put In An Offer?

Any thing that will affect a Buyer's willingness to purchase a property should be stated as a contingency by the Buyer.  The three most common contingencies are for the financing and appraisal, and inspections.  The purchase contract must include the Seller's responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.

Who Gets The Furnishings When A Home Is Sold?

Anything permanently attached to the property when the offer is written goes with the property. Furnishings are the owners personal property unless negotiated otherwise. Lenders do not look favorably upon personal property being part of the purchase price.

Whose Obligation Is It To Disclose Pertinent Information About A Property?

The Seller is required to disclose all facts materially affecting the property that are known or accessible.  This includes but is not limited to:

  • Homeowners' Association Dues
  • Any restrictions on the use of the property - zoning and association CC&R's
  • Permits for work done on the property
  • Presence of any neighborhood nuisances
  • Noises which a prospective Buyer might not notice - ie. dog barking at night, close proximity of railroad tracks, poor TV and cell phone reception, death that occurred in a house within the past three years.
    disclosure rules prior to a home purchase.

    How Do You Determine The Value Of A Troubled Property?
    Buyers considering a foreclosure property should obtain as much information as possible. It is also important to examine the property. If you are unable to get into a foreclosure property,The Real Estate Team will  check with surrounding neighbors about the property's condition, the lender regarding the range of bids expected, and the Title Company for liens. They will prepare a Comparative Market Analysis (CMA) to assist with determining the price to bid on the Courthouse steps.

 

What Are Some Tips On Negotiation?
The more you know about a Seller's motivation, the better you will be able to negotiate.  For example, Seller who must move quickly due to a job transfer may be amenable to a lower price with a speedy escrow. Other so-called "motivated sellers" include people going through a divorce or who have already purchased another home.
Remember, that the listing price is what the seller would like to receive but is not necessarily what they will accept. The Real Estate Team's members are Certified Negotiators.

Do I Need An Attorney When I Purchase Property?

In California you do not need an attorney.


The Real Estate Team
The Real Estate Team
Broker-Associate, Realtor