Don’t Low Ball That Offer!

Do you know the difference between cost, price and value?

When it comes to the real estate transaction, a low ball offer is probably one of the worst things that you can deliver when you come up to bat.

Facing the Consequences

Low balling an offer to the seller or landlord usually has grave consequences.  No matter the financial position of the seller or landlord, right off the bat, you risk insulting them.  The most common responses are to counter the offer at the original full price, refuse to counter, or for the transaction to become a series of balls and strikes with multiple counter offers, usually ending in someone fouling out. The buyer or tenant may eventually get the price that they want, but the cost will be the loss of goodwill in the transaction and more.

Setting the Stage for the Duration

Once woundedness occurs, it is very difficult for that change and for the wounded party to recover.  This is also true with bank committees representing short sales and foreclosures who have no emotional attachment to the home because they are managed by people with emotions whose work environment and nature of the transaction tends to create high stress situations.

Once ill will is established in the transaction, it can promote breakdown in other areas such as negotiation for repairs or lease renewal or extension.

Questions to Ask First

Before you make that low ball offer ask yourself a few questions:

1. Do I really understand the cost of my low ball offer?
2. Is my offer based on similar nearby homes that have recently sold or leased at the same condition, type, and price range?
3. Would I want a buyer or tenant to do the same thing to me if I were in his shoes?
4. What is my REALTOR recommending?
5. What is my plan B if this doesn’t work?

You Make the Market

After you have sincerely considered the questions and are comfortable with the possible outcomes, go ahead and make your best advised offer.  Until you make your offer, even if by necessity low due to property condition, market conditions, and recently appraised values, you never really know what might work for the other party.  However, be advised.  What you pay will become your very own comparable for your future appraised value certainly for the next 6 to 12 months establishing your own neighborhood market price. And you’re sure to become the talk of the next neighborhood bar-b-q, having established a downward trend for neighborhood values for everyone for months or even years to come!

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Chrystal is a REALTOR® and principal of The Safari Group, a local, homegrown real estate firm, specializing in all phases of the residential and small business real estate market.  Celebrating over 20 years in tenant procurement and rental portfolio development, and over 13 years in general residential brokerage in the Charlotte Metro Market, Chrystal offers guidelines to assist tenants, home buyers and sellers in evaluating today’s real estate market for maximum leverage.  In the TOP 5% Nationwide for closing the transaction with Estately, Inc, a national referral company, she can assist you with all your real estate related needs. Contact her today for more at 704.562.1030 TXT/PH or Chrystal@TheSafariGroup.com  Join the conversation on Facebook https://www.facebook.com/TheSafariGroupRealty

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TheSafariGroup.com

FOR IMMEDIATE RELEASE

CHRYSTAL SAFARI ANNOUNCES THE LAUNCH OF HER NEW REAL ESTATE FIRM, THE SAFARI GROUP

May 12, 2010 (Charlotte, NC)  Chrystal Safari, real estate broker and principal, announced today the launch of The Safari Group, a local, homegrown real estate firm, specializing in all phases of the residential and small business real estate market, including New Construction, Finance, Marketing, Objection Handling, Relocation, Technology, Foreclosures, Short Sales, and Luxury Homes.

The Safari Group consults on all aspects of real estate ownership from acquisition to liquidation, portfolio development, and property management.  As an internationally recognized Certified EcoBroker®, Chrystal offers guidelines to assist home buyers and sellers in evaluating true green features and their benefits to real property value, home ownership, tax savings and mortgage closing table capital contributions.  Chrystal is backed by certified and insured professionals to assess and protect your energy utilizing investments based upon your personal needs.

Seasoned homeowners Rick and Scherel Fisher shared, “Chrystal’s suggested listing price had us a showing and an offer within hours of the house being listed.  We had no trouble getting an adequate appraisal for the house and added on closing costs.  She helped us get to closing with difficult buyers with bad credit that we could have never managed on our own.  We highly recommend her real estate services.”

About Chrystal Safari:

Chrystal Safari has over 16 years experience in personal property management and residential real estate sales and is a licensed REALTOR® in North and South Carolina.  As a MASTERS Designation holder, she is a specialist in New Construction, Finance, Marketing, Objection Handling, Relocation, Technology, and is a multi-million dollar producer.  Chrystal is a member in good standing of the Charlotte Regional Association of REALTORS®, North Carolina Association of REALTORS®, and National Association of REALTORS®.

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Contact:

Chrystal Safari
The Safari Group
PO Box 1192
Pineville, NC 28134
704.562.1030
http://www.ChrystalSafari.com

How Good is Your Good Faith Estimate?

The Real Estate Settlement Procedures Act, known as RESPA, requires mortgage lenders and brokers to provide a good faith estimate to customers outlining a list of fees and costs associated with obtaining a mortgage within three business days of applying for a loan. RESPA outlaws kickbacks that increase the cost of settlement services. RESPA is a HUD consumer protection statute designed to help home buyers be better shoppers in the home loan buying process, and is enforced by HUD.

A move has been made to make the Good Faith Estimate a standard form which makes it easier for buyers to compare different brokers’ and lenders’ quotes and charges associated with closing the transaction.

The closing or settlement costs are the mortgage fees associated with the purchase and closing on a property and should include every expense associated with a mortgage loan, including title insurance, taxes, inspections, and other charges required to close the loan.

A good Good Faith Estimate should be fully itemized and include fees which fall into six basic categories:

• Loan fees, including loan origination fees which should not exceed 2%, appraisal, credit report, etc.

• Fees to be paid in advance, such as interest on the loan

• Reserves the lender requires to be escrowed, such as 1 – 3 months homeowner’s insurance and 1 – 3 months pro-rated real property tax if those items are escrowed with the monthly mortgage

• Title charges, such as attorney fees and title insurance

• Government charges, such as recordation fees

• Additional charges, such as survey, home inspection, wood destroying organism inspection, and home warranty are usually provided by your REALTOR® and may not be reflected on the Good Faith Estimate originated by your lender representative.

The Good Faith Estimate also includes information that is not an estimate, but states facts such as the type of loan applied for, such as VA, FHA or Conventional; proposed mortgage payment including escrowed amounts, if any; total loan amount; down payment; seller paid closing costs or agent rebates; and interest rate.

The Good Faith Estimate is only an estimate. Though it’s not uncommon for buyers to wait in the bank parking lot before closing for final figures from the attorney’s office, the final closing costs can easily be calculated by an astute real estate broker to assure your peace of mind in the final days prior to closing.

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As an accomplished real estate broker, Chrystal Safari has earned the internationally recognized EcoBroker® Certification which allows her to better serve your wants, desires, and motivations to bring added benefits to your every real estate transaction. As your Preferred Real Estate Broker, she provides a new level of service in addition to already full-service standard real estate offerings. As one of only 35 certified EcoBrokers® in the Charlotte Metro area, she offers guidelines to assist home buyers and sellers in evaluating true green features and their benefits to real property value, home ownership, tax savings and mortgage closing table capital contributions. After over 25 years of dedication to stream and undeveloped land clean up, storm drain marking, and as an avid whole house recycler, Chrystal finds it very fulfilling and exciting to have mastered this program to become one of a select few certified EcoBrokers® in our market! Call her to add the Environmental, Energy, and Green Market Advantage in your next transaction.

Foreclosures: The Good, the Bad and the Ugly

There are many distressed properties available in our market, also known as foreclosures.  They are easy to find and generally easy to buy, with some exception.  But if your goal is to realize a financial return on investment, your purchase strategy must be lead by the facts, and not the emotions, of the transaction.

There are basically two types of distressed properties: those distressed by the financial condition of the owner and those in distressed condition.  Of those two types, subcategories exist that need to be understood for your maximum benefit and protection.

The two types of distressed properties are those that are:

1. The result of the homeowner’s financial position or condition or 
2. The result of the property’s inability to overcome a significant structural or other depreciating issue(s)

The better of these two scenarios for the future buyer is item one.  A home owner’s financial position or condition may lead to a foreclosure due to his inability to continue meeting his monthly housing costs, including mortgage and other escrowed amounts such as HOA dues, etc. 

In this case, if the homeowner is unable to rent or sell the property at a profit or to break even, he has few options.  He may sign the house back over to the lending bank or agency.  This process is called a deed in lieu of foreclosure.  Another dilemma may be getting behind in the mortgage payments and to become foreclosed upon.  Both of these cases have a significant negative impact against the credit score that lingers for several years. 

Foreclosures may be listed in the local Multiple Listing Service, be available as a Sheriff’s Sale to be sold at the courthouse steps, and/or be listed on the presiding attorney’s website for sale at the courthouse steps, or may be available at an onsite or offsite auction. 

There are also a myriad other websites that market foreclosures to capture buyer clients’ information.  If the lender is known, the pre-foreclosure department may accept an offer before the property hits any of these venues.  I have represented clients in purchasing foreclosures in all the above scenarios.  

A form of pre-foreclosure is increasing in prevalence and is called the short sale.  This typically takes place prior to foreclosure, but it’s headed in that direction.  A short sale occurs when the homeowner owes more on the property than its market value and fails to maintain his mortgage obligation.  Currently about 50% of these transactions close.  Those that don’t successfully close become foreclosures.  Last year’s first quarter there were 25 short sales being negotiated in our market.  This year, first quarter, there are 700. (Wells Fargo Loss Mitigation Supervisor Gwen Oberg, Secondary Market Loans, Charlotte Market).

Though the short sale or foreclosure sale may be an arduous process, if the property meets all your requirements, it may be worth the extra effort and patience it needs to get a great deal.

BUT BUYER BEWARE

Distressed property type two is not always obvious.  While the home or property owner may or may not have a financial condition that leads to a short sale or subsequent foreclosure, the property itself may have prohibited a timely and profitable sale.  It’s easy to see that a 3 bed, one bath home is functionally obsolete in our market, but with the right changes that house could become one of the best in the neighborhood. 

What might not be apparent is the fact that from the front yard of a WOW house a major highway is visible or audible and on the other side of the street commercial development and traffic will greatly affect potential for appreciation.  Your trained and experienced REALTOR® knows what to look for in evaluating a property’s potential for appreciation or depreciation to help protect your best interests. 

Don’t be misled by well-meaning friends, neighbors, and co-workers who tell you all about the new homes they are purchasing for pennies on the dollar in the best neighborhood in town and lose faith and trust in your REALTOR^®.  If you begin to feel jealous and angry that those folks a getting what should have been yours, you may make an ill-advised or hasty buying decision that you’ll later regret.

chrystal.safari@gmail.com