Brave New (Real Estate) World

It’s a tad bit different for sellers in Foster City than it was just a few short months ago. Inventory is up (32 single family and 42 condo/townhouse) and the number of pending sales is down (9 single family and 8 condo/townhouse). In this era when the average number of days on the market has increased…and may continue to increase, sellers will need to be prepared when negotiating an offer when it comes in. Buyers in this current market feel like they have plenty of leverage when it comes to negotiating, particularly in the range over $1.3mil, and selecting the right real estate agent is more important than ever.

Already in Foster City we’ve seen a few examples of listings that go into escrow only to have their deals fall apart…and sometimes that’s happened after a painfully long time in the process. In this market it’s not uncommon anymore to hear stories of buyers re-negotiating 2 and 3 times after the contract has been ratified over issues involving credits or repairs and in some cases buyers have asked for price reductions prior to removing contingencies 10 days to 2 weeks into an escrow. It’s also more common to see offers accepted contingent upon the sale of a buyers property…something that was virtually unheard of in years past.

So, what should you do? Here’s a couple of important suggestions: 1) Make sure that the buyers are not only qualified, but approved for their loan. It wouldn’t hurt at all to ask that the buyers be approved by two separate banks. If you as a seller are comfortable early on in the process that your buyer will get their loan, you’re certainly going to sleep better…and the chances of chiseling on price later in an escrow will be reduced.

2) Have a solid contract going in. The fact is that the buyer is most likely going to have some leverage in negotiating the price right now. Having a contract that gives you favorable terms should help you to eliminate arguments over repairs and other problems that could come up later. I also think it’s important to be aware of any and all problems that the property has going in…so that your not surprised by an inspection done by a buyer in escrow and fall victim to a bid given by a contractor of the buyers choice.

Gone are the days when sellers held all of the cards and every sale was “As Is” with no contingencies and sellers just relaxed all the way to the bank. It’s really is a new world out there.

Comments

  1. I like that picture, Jim!! XOXO

  2. Jim Minkey says:

    That’s my wife…she’s the only one who wants to send me hugs and kisses. (At least sometimes she wants to!)

  3. Hey there,
    Came across your blog and wanted to say “hi” from RE/MAX Preferred in Madison, WI. Nice blog!
    Peg

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