If you are thinking of buying or selling property, what do you think is the most important point to consider? First and foremost is to assess whether your expectations are realistic.  Having unrealistic expectations is probably one of the most common obstacles that can derail real estate transactions.

It’s important to understand that the process of purchasing and selling Real Estate has its own unique set of ebbs and flows distinct from most retail buying and selling.  For example, when you want eggs, you go to the store, pick up the eggs and pay for them—at their listed price. Real Estate, however, is a living market, affected by constant fluid and changing market factors.

Let’s consider how unrealistic expectations can effect purchasing Real Estate . For example, let’s say a purchaser is looking for a home in Woodbridge, VA in the under $300,000 range; a very competitive price range right now. The purchaser shows interest in a home that is perfect for their needs, fits their budget, is in great condition and is in a very popular neighborhood. Given all these factors, one should expect that the property will  receive multiple offers if it is well priced. If this is the house the purchaser really desires, this is not the time to bargain and make a low ball offer. That will cause someone else to purchase the home that you love, which can be heartbreaking. There are times that an offer can be a lower offer, but, not in this case. This is the time that a buyer must be ready to make a competitive offer. What are some factors that help to make an offer more “competitive?” It could include a variety of things:

-An offer over list price (but be careful that it’s still in a range that can appraise).

-Asking for less closing costs. This will increase the seller’s net without raising the sales price and risking a low appraisal.

-Offering to pay for the termite inspection. This is typically paid for by the seller, but, if your home inspector is also a termite inspector (mine is) than he can add it to the cost of your home inspection for a small fee.

-Opting to pay for your own Home Warranty, typically offered by a seller ($275-$550).

However, there are some things that you should never consider as a “bargaining chip” when making a competitive offer:

-Offering a “No Home Inspection Contingency”—unless you, yourself are a contractor and can spot evidence of deficiencies.

-Offering a “No Appraisal Contingency.” Can you believe it—an agent once asked a client of mine to consider a No Appraisal Contingency as a way to make their offer more competitive. On some loans, that wouldn’t be a problem, because the appraisal contingency is mandated as a condition for financing. However, if my buyer had a type of loan where this wasn’t mandated and the appraisal came out $15,000 too low; my buyer would then be obligated to make up for the difference out of their own pocket, or forfeit purchasing this house, AND give up their Earnest Money Deposit, as well. No, I would never suggest that my client take this route.

I do have to say, though, that once a situation came up where an appraisal came in a little lower than the contract price. There happened to be a backup contract on this property with no appraisal contingency in it. At that point, the buyers decided to make up the difference between sales price and appraisal—however, they didn’t enter into the contract that way and had they decided not to make up the difference and back out of the contract, they would not  have forfeited their Earnest Money Deposit.

Now let’s talk about the pitfalls for sellers who may have unrealistic expectations.

I’m sure everyone can guess what the number #1 unrealistic expectation for sellers is: THE SELLING PRICE!. . .you guessed it! It always boils down to an unrealistic expectation of the price compared to what the house can actually bring. The goal is to get your house in the stream to bring the most buyers that are home searching. We can arrive at the list price based on an in depth analysis of other similar homes on the market and their final selling price.

However, once your house is listed, you also have to pay attention to how much traffic it is drawing, and what kind of feedback agents and buyers are leaving. You want to make sure that you don’t overdo your home improvements thinking that you will get a dollar for dollar return. In fact, many home buyers prefer a generic tidiness, a sense the property has been well-cared for and has good curb appeal as opposed to going overboard on expensive home improvements. Many buyers would rather put their own imprimatur on a home with their own improvements, rather than paying for yours over a 30 year mortgage! Make sure you discuss your intentions with a good contractor and check that they understand you want upgrades that are geared for selling the property as opposed to upgrades that are specific to you particular tastes. Make yourself aware of what upgrades impact pricing the best and focus on those. Not all home improvements will have the same impact.

If you can’t honestly face the feedback and implement it in your selling strategy than your house will just be listed and not sold.  Is that your goal? If not, then, it’s time to have a heart to heart talk with your Realtor; or perhaps a heart to heart talk with yourself. It’s not always easy to face,  but having realistic expectations will help you reach your goal of a house that is sold.

Do you want your home listed——-or SOLD? Always remember: Time IS money!

If you would like to talk to me about your particular situation, give me a call – 703-338-1129 or send an email carol@realtyworldselect.net

Also, try out my Home Search Feature if you are looking for a home. Also, take a look at my video about Searching for Homes in bad weather.

I’m looking forward to hearing from you!