Two New Contracts - Interesting Negotiations!

The last several days have been extremely hectic, and although I try to write every day, some times it is just impossible, this week being a classic example. In the last few days, we have ratified (all parties have agreed to the terms and signed binding contracts) two contracts on homes we had listed for sale and have had a home inspection response on a home we had listed and signed contracts on last week. All three cases are interesting from the standpoint of what both buyers and sellers can expect when negotiating a sale and the "aftermath" of the initial contract.

Case #1 - this home was almost an identical twin to a home we sold in June of '07 (8 months ago) for $525,000 - several doors down on the same street, both totally renovated to virtually the same specifications. The only difference (besides 8 months) was the the home sold in June was currently lived in (and very nicely decorated) and this home is vacant. Because the owners had already moved, they wanted to set a price that would attract buyers and, hopefully, a quick sale. The original price was set at $465,000 on January 9th. By January 25th we had tracked numerous showings, but no offers and the price was reduced to $447,500 - The Magic Number! We quickly received an offer but it was too low to accept - our counter offer was close to the asking price - a very aggressive price - and the buyer accepted. Good values are still in demand and although offers may come in even lower, all things must be considered. Is there interest in the property, have other agents expressed interest in possibly making an offer, is the offer TOO low to consider - don't forget the home last week with 9 contracts - if we were to offer the property at this price we surely would get multiple offers. Working with a knowledgeable agent is, again, paramount! We presented our counter offer with the details of the comparable sale just doors away at $525,000, we presented our home inspection, we presented our termite inspection, and everyone knew this was a good deal!

Case #2 was an entirely different story. This home was listed in July of 07 at a price of $825,000 against our recommendations of listing under $800. An offer of $750,000 was received early on in the process and, we believe, could easily have been negotiated to at least $775-$780. The seller was in no hurry to sell and countered the offer at full price. Of course, this fell apart. In October, the price was reduced to $789,900 and no further reductions were taken. Although there continued to be good showings, there had been no further offers. We received an offer of $715,000 and countered with a "best and final" of $750,000 which was accepted. By overpricing initially and not negotiating the earlier offer, the seller will realize AT
LEAST $25,000 less - a lesson learned, again!

In the case of the home inspection, what a time we're having with that! This is a relatively new home, completed in January of 06 and rented for one year, the home inspector came up with a list of 107 items! You might think that this house is a disaster - it is not! There are items listed that are actually funny - for instance, the top of one of the doors does not appear to be "fully finished to the extent of the entire door" and the "deadbolt does not open to it's full length". Now, the inspector went so far as to inspect the tops of doors from a ladder and to measure with a tool he carries exactly how deep the deadbolt goes into the frame. Other items that really do not belong on a home inspection list, such as "provide operating instructions and warranty on garbage disposal" were included in this list. The buyer honed the list down to 44 items they would like corrected (none of which are "deal killers" by the way) and we are working on our response. ... I'll give more information on this as we progress.

So, this might help you get an idea of not only what agents do behind the scenes, but some of what buyers and sellers can expect in this strange market.

As always BE INFORMED and CHECK BACK HERE OFTEN