4 Things to Consider If You Are A Frustrated Buyer

I hear stories all the time about friends of friends who are trying to buy houses and the problems they run into. In my market in Modesto the most common problem I hear about is buyers writing offers over and over again just to have them all rejected by sellers. Here is my advice to buyers who are trying to buy but are not getting their offers accepted.

1. It is not necessarily your agent’s fault

While that statement may be shocking to some, it is true. The agent is the typical scapegoat for frustrated buyers. Ultimately though we can only be as good as you let us be. What I mean by that is we are your agent, not your attorney- meaning we act on your instruction and do not (and cannot) make decisions on your behalf. If you are giving your agent bad instructions and not listening to their advice, you may be getting less than optimal results.

2. OK, so maybe it is your agent’s fault

Let’s say it becomes apparent you are working with the wrong agent. It happens- sometimes people don’t “fit” and that is OK. The correct, polite and appropriate thing to do is to be an adult and thank them for their help thus far but because (insert your reason here) you are choosing to not work with them any longer. Trust me- we can take it. Speaking from personal experience, that is a pill much easier swallowed than finding out you told some elaborate lie to get out of the relationship.

3. It is not me or my agent. Now what?

The most important thing you can do if you are at a loss as to why you cannot get an offer accepted is this: Reevaluate your price range. Most people are inclined to look at homes that are at the top of their price range. This gives them little room to be competitive when asking for concessions such as repairs and closing costs. What I often suggest is to step down a bit in price and become the buyer with the upper hand against the competition who are maxed out on price. For example, if your max price is $150,000 and you need your closing costs paid, you may want to step down a bit to the $140’s so you have more room to offer more money if need be. The second most important thing to do is OBJECTIVELY look at how the offers you submit are structured. Look at them as if you are the seller looking at an offer from a buyer.

These are key points to consider:

• Price: Is my offer reasonably within asking price for my market? Know your market. Is it slow? Do homes sell for 90 percent of list price or is there an inventory shortage and homes sell for 105 percent of list price?
• Escrow term: Am I asking for too long of an escrow, or not allowing enough time for short sale approval? Saying up front you are unwilling to wait any less than 60-90 days for a short sale approval is the surest way to have your offer rejected.
• Repairs/Inspections/Certifications: Am I asking for repairs, inspections and certifications to be done at the seller’s expense? This turns off a lot of sellers, especially in a short sale situation. You should never expect a short sale seller to pay out of pocket for any repairs or inspections. A savvy agent will know this.
• Closing costs: Am I asking for an unreasonable amount for closing costs? Most good lenders can do a loan for a buyer with a 3% concession for closing costs. If a buyer needs 4 or more percent, something is wrong and they should get a second opinion on their financing. Remember: Anything you want the seller to "pay" comes off of the seller’s bottom line and is going to be viewed negatively by the seller.
• Do you have a good loan pre-approval? Having a pre-approval from a local, reputable lender speaks volumes for your status as a buyer. Your letter should say that your credit, income and assets have been verified, state your mid-FICO scores and the only contingencies should be a satisfactory preliminary title report and property appraisal. It must be dated within 30 days from when you are making your offer and must be for at least the amount you are offering on the home.

4. Last, and certainly not least- always put your best foot forward

In a market where almost every property has multiple offers and you are dealing with institutional sellers it is imperative that every offer you make be your best offer. Many sellers are not countering anymore, they simply choose the one they feel is the best and move forward. You may not get the chance to offer more money or put more money down or pay your own closing costs. So, if the house is one you cannot live without do not leave anything on the table. Come up with the best possible price and terms you can and hope for the best. You won’t always win that way but at the very least you will know that you gave yourself the best possible chance.

Stay tuned to my blog for more tips on buying real estate in Modesto. To start your search now, click HERE.