Today, I would like to talk about 3 Pitfalls that can tank a sale and how to avoid them. But before we get started, let’s look at the Outer Banks real estate market.
Comparing the first 6 months of 2018 to that of 2019, there were 857 single family home sales averaging $444,948. This year there has been 892 sales averaging $423,533; a rise in the number of sales but a slight decline in the average sales price. Corolla Oceanside has been the hottest market; garnering 94 sales with an average sales price of $721,000.
Interest rates remain favorable, sales activity is on the rise and prices are flattening – these trends continue to make 2019 an opportune time to invest in real estate.
Now let’s talk about 3 pitfalls and how to avoid them. Every buyer wants the best deal possible – so the mindset can sometimes be – let’s make a really low offer and see what we can get the seller to come down to. Pitfall #1 – Low Ball offers. This can backfire; causing a seller not to negotiate at all. Negotiations will struggle if they continue. BETTER – I will research the past sales, look at how long the listing has been for sale and if any price reductions have been made. Using this information, we can formulate the lowest reasonable offer possible and present this to the seller’s agent with supporting details. Our offer is now being supported by market data and no one should take offense to that.
Another pitfall can come after a successful contract negotiation as you work with the lender to get financing. Pitfall#2 is the failure to get pre-qualified with a local mortgage lender. Avoid this by talking with the local lender before any offers are written. Iron out the terms that you are seeking, down payment requirements, and closing costs estimate. When this is completed, the lender will give you a “pre-qualification letter” and we will use that to strengthen our offer by showing the seller you are prepared and qualified.
Another pitfall can arise after the buyer reads the home inspection report. The report will undoubtedly list many issues that need to be addressed, provide photos of the defects and use a lot of red ink. This can be overwhelming and discouraging and cause a buyer to want to terminate the contract. Pitfall#3 is the failure to set your expectations on the condition of a used home. An inspector is hired to find problems and they will find them. Realize there will be problems and repairs needed in most every home. I will have specific contractors quantify the repair list with cost estimates to fix the problems found. Now we have credible information that we can use to negotiate with the seller. You may be surprised at what we can work out. So, give it a chance, you got this far, lets keep the sale moving forward.
As your real estate agent, I can help you avoid these three pitfalls. Again, My name is Rick Drumm with Outer Banks Blue, and I’d love to put my 26 years of experience to work for you. Remember, Home Work is what I do best.