LeKaren Lockridge's Blog

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To Inspect or Not To Inspect, That's a Question? Are you Kidding?

MAR

You just can’t imagine how many people have asked me if they should get a home inspection. I get, “Is it really that important for me, I know about construction so I should be able to check out the property.” Or “my brother-in-law does construction, so I think I’ll have him check it out.”   So I’m thinking, “Okay, but if you do, it’s your butt, baby, I’m not taking any blame for this,” and I make them sign a form that says so too.

People think that a brand newly built home is free from all the problems that an older home will have. They see a new home and think, “ this is the best deal for me, it’s free from defects and nobody has ever lived in it or messed it up”, but is it the best deal? The thing is, all the ‘bugs’ haven’t been ironed out yet. Not the crawling or flying kind of ‘bugs’, the kind that will get under your skin and make you think that you have been had. “Oh my goodness, what have I done.”

Here’s a real story about my brand newly built house. We had an inspector come in and he went top to bottom and believe it or not, when it was over, we had a huge list, in a newly built house, no doubt. For instance, the insulation was covering the vents in the roof eaves, very bad if you expect to get the hot air vented out of your attic and not end up coming in your house making your energy bill sky rocket. All the inside wooden doors were painted but not the bottom or top of the doors, so in time, since the doors were not ‘sealed’ and we live in a very humid area, moisture will get into the wood and the doors will swell and not close and really look awful and they will have to be replaced. Also the very expensive stained glass, wooden exterior door at the front was not stained or sealed bottom or top creating the same type of possible problems. In the master bedroom we have a huge arch window over the triple tall windows in a cathedral ceiling. We found the arch window wasn’t even secured, it was just put in with a wish and a prayer, kind of just sitting there. A really good gust of wind, like the hurricanes we have, could have had that one on my head.

Okay, what else…, I’m thinking, okay you ready, here goes.…, the vent in the utility room wasn’t hooked up, we had a drainage problem in the back yard, the texture on the ceilings in three rooms were not consistent, there was no key for the gas valve on the fireplace, the countertops in the kitchen were not sealed in the back, outlet covers were missing, one of the door knobs leading to the master bath was dented, one of the toliets was missing a handle, the chimney cap was painted on one side only, the attic access door is warped, the siding under the flashing at the rear of the house wasn’t painted, the back door didn’t latch or lock, there were no window screens on the second floor, there was an outlet/switch combination that was improperly wired, there was a cabinet in the master closet that was stained and needed repainting, the a/c evaporator drain wasn’t property trapped, there was gaps in the caulking at the top of the shower enclosure, the smoke detector in one room was not installed properly, the vent piping for the range hood was incomplete and finally, several joists in the detached garage was missing joist hangers. And we were two days away from closing and was told the house was ready.   Well, we had a meeting with the builders’ contractor and the builders’ representative and we came to a fix it or else resolution. Thank goodness we had an inspector. Very good use of a little bit of cash.

So the moral of the story, remember when stories had morals, well the moral is, don’t forget to have an inspection done, no matter if it’s a newly built or a 30 year old house. Could save you tons of money later on. And don’t ask me what I think, cause baby, I will tell you. Don’t be stupid, play the game with all the tools available, and get a reliable inspector, there’s some really great ones out there.

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How to Handle a Lowball Purchase Offer on Your Home?

JAN

Okay, so you have kept your home spotless, made the beds every day, did the dishes, kept the yard up and then you get a purchase offer that’s a lot lower than your listing price or that you expected. What do you do? Do you immediately say, “Absolutely not”? First, try to keep your emotions in check, it’s just possible that this person is only ‘testing the waters’ and could just want to see how urgently you need to sell. Sending them back a well thought out counteroffer could turn into a sale.

So your agent called and said they had an offer and they want to come over and discuss it with you. Now you’re excited! Then of course you asked them what the price is, and it’s lower than the asking price. Now you’re mad! There goes your emotions again; stop and think about how to change this for the better. Look at the facts presented to you, talk to your Realtor and come up with a counteroffer that would keep the buyers interested.

The very first thing you must do is take your emotions out and put them on a shelf or in a closet and lock them up. I know you think it’s a terrific house and you have taken very good care of it, but in this market, is the price that’s listed a true market price or just your warm fuzzy feelings getting in the way? When a Realtor goes to a listing appointment, it’s normal to find out what a homeowner thinks his house is worth. Then the agent tells them through their research what it actually is worth in today’s market. This is done by going back 3 to 6 months and looking at the sold and the active listings in the near vicinity. You absolutely do not want to price your house so high that you may be sitting on it for a long time. Most people are fairly neat, but to keep your house clean and pristine on a daily basis is very trying especially if both homeowners have outside jobs.

Some buyers, especially an investor will be looking to pay under market value. Most people will be worrying that they will pay too much. But you have to remember their agent has told them what the house is worth so they have agreed to submit a low offer even with this knowledge. So don’t fall for this ploy, try to rearrange their thinking.

There are several ways of adjusting your listing price to negotiate a counteroffer. One of course, is to offer a lower price according to the market, but not too low. Also, if you have offered closing costs or home warranty protection included in the price maybe that would be something you could eliminate. Maybe you could take your washer, dryer and refrigerator with you instead of leaving it. You could also negotiate to have them pay for the survey or title. It’s all a matter of what the market will tolerate and what you would be willing to accept.

Remember I said earlier that your Realtor has researched the market to find out what houses have listed and sold for in the last 3 to 6 months. Well the buyer’s agent has done the same. Ask your Realtor to get with the other agent and see what houses they used in their research. You have to find out if, indeed the houses are similar, otherwise you’re comparing apples to pomegranates. If your house is a 2800 Sq.Ft, 2 story with a 3 car garage, a pool and it’s on a very large cul-de-sac lot and they are comparing it to a 2000 sq. ft., 1 story with a 2 car garage on a standard residential lot, then this is the pomegranate not the apple. When you send your counteroffer to the buyer’s agent include these things that you have discovered to reflect your reasoning for the asking price. But if they have picked up homes that are apples, then there may have been new listings that have dropped the average price making your price unrealistic. Most Realtors keep up with these changes on a regular timeframe so that prices can be adjusted to fit the market, but some could have slipped by very recently. Also, some Realtors include foreclosures in their research making the price drop. This is also a mistake considering the average foreclosure is generally not in the best of shape. Your Realtor will be able to advise you on this.

So after all of this, if the offer is still too low and you don’t want to counter, there is still another way that might work. Get your agent to call their agent and see if there is any way to close the price gap so that a counteroffer would even make sense. Find out if this buyer is a potential homeowner or an investor, this will also make a difference. Like I said earlier, investors usually pay cash and want to low ball the price, because they plan to resell or use the house as a rental unit and need the price as low as possible.

So to recap; shelf your emotions, talk to your Realtor, compare the listings and solds and plan your counter. Whether it’s changing your price, lessoning the seller concessions such as closing costs or whatever, it’s your house and you have to be comfortable with your sale, but don’t be unreasonable. Remember if you really want to sell, then a marketable price is the way to go!