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Selling Your Home in a Seller's Market
If you are thinking of selling your home, we offer a free evaluation of it's value in today's market, and this advice:
The change in the market has benefited sellers, of course, with higher prices, but calls for caution to avoid some of the potential pitfalls caused by the sometimes less than ethical strategies of buyers (or their agents) in coping with a strong market.
Almost every agent has had buyers who missed out on homes they wished to buy because their offer was too little or too late. This can lead them to make a strong offer the next time they see something they might be interested in before they really have decided to buy it, simply to preempt the property and tie it up until they make up their minds. They do this by taking advantage of the fact that most brokers' "binders," the form for offers to purchase, include a provision that the buyer can back out without penalty for a period of time after having the home inspected, often 2 weeks or more. Buyers can and do take advantage of this, tying up the property while continuing to look at other properties. Or they may wait for weeks and then try to bargain the price down based on some trivial defect revealed by their inspection. . . after other buyers you may have had are gone.
All these strategies unfairly harm sellers. Keeping your home off the market for weeks for a bogus offer costs hundreds of dollars in taxes, insurance, utilities, and most of all, the loss of the use of your investment.
In some cases, sellers can benefit from avoiding the "binder" altogether and waiting until the buyer is ready to sign a contract and make some real commitment before taking the home off market. At the same time, we donít want to chase serious buyers away by appearing unreasonable. From the buyer's point of view, they are spending a few hundred dollars on inspections. Each situation must be evaluated to determine the best choice for the seller, and there are a number of alternatives to simply signing a standard binder.
One alternative we have introduced is to add the provision that if the buyer chooses to withdraw because of "defects", that those must be significant, that there must be one that can reasonably be expected to cost over $500.00. At Teran Real Estate, we are pioneering solutions for our clients to minimize losses from buyers who are not committed and serious.
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