Barb (one of my team members) called me yesterday as she was going to write an offer for some young clients who found that proverbial “perfect home.” Our football Cardinals had already demolished Detroit earlier in the day, so I was good to go. For my real estate team, I help our agents prepare the contract paperwork. I would prefer it wasn’t on a Sunday, but hey, it’s our job!
The home they wanted to buy had been originally listed at $315,000, and was then reduced in $5000 increments until it hit $299,500. And that’s where Ben and Benita (not their real names) saw the home as the listing info had been automatically e-mailed to them. Now the price had fallen within their buying parameters which was under $300,000.
Barb showed Ben and Benita the home immediately, and they both loved it, and wanted to buy – NOW! In their words, this was the only house they found that they both agreed on the location and home.
There was, as we so often say in our business, some issues. First, we needed to get the PQF (Pre-Qual Form). Very fortunately our lender Sandy who they had been working with answered her phone. She agreed to prepare the PQF and e-mail it to me. Secondly, they were only pre-approved up to $285,000 and this home seemed like a deal at $285K. On top of that, they needed to get an FHA loan as they were just coming out of their three year wait penalty due to a previous foreclosure. To complicate matters, another buyer had submitted an offer earlier that day as well. There would be a competing offer. This deal was no slam dunk!
After discussing with Barb and the buyers, we decided to meet at our office to write the contract. Barb called the seller’s agent to see if an FHA offer of $285k would even fly. She was informed that the other offer had not been accepted and would not be addressed until Monday morning. Further she told Barb the other offer was for $285,000 AND was FHA also. So get this! This house was on the market for 66 days, had three price reductions, and two offers come in on the same day for the same price and both FHA. Wow, we had a fighting chance.
Obviously, multiple buyers/offers benefit the seller. We prepared the buyer that the “normal” thing would have the seller countering the offer on a “multiple counter offer” form and that if the other buyer raises their price, they will probably get the home. And typically, the seller says to the competing buyers, “give me your highest and best deal.” Usually this is how a seller will get their best price. And considering that Barb and the buyers felt this was a strong value at $299,500, it would seem logical that the seller could easily get more than $285K. In other words, we needed to temper our client’s expectations.
But here’s the thing. We usually never really know what’s really going on in the personal life of the seller. I’ve seen unbelievable things in over 35 years in this biz!
We were however limited by their $285K PQF. Well, all we could do was to make some small adjustments within the contract to try and rise above the other offer. So Barb found out that the seller would prefer to close in 60 days which is long by today’s standards, but in this case, this worked out great for the buyer as well. Then, we agreed to use the title company of the listing agents choice, which was also a national reputable company. The buyer also agreed to pay for a home warranty themselves, rather than having the seller pay for it which is customary. And finally we reduced by two days the “Due Diligence” (inspection) period. Ben and Benita signed the contract.
Oh and lastly, we had Benita write a letter directly to the seller letting the seller know how much they loved their home – and their dogs! Hello, personal!
I wasn’t really prepared for Barb’s phone call this am to say that the sellers accepted Ben and Benita’s offer! No multiple counter offer. No raised price. Acceptance. Incredible.
Why did the seller accept their offer? According to the seller’s agent, there were a few things in the offer that worked better for them! According to Benita, she had asked everyone she knew to pray they could get this home. Hmm.