EdisonNJRealEsate

It goes something like this:  You get a call from an Buyer's Agent: "Hi, this is Anne Oyance of Bobble Head Realty..I have an offer on...blah, blah,blah..."

"That's great, Anne..." you say, and then make plans to present the offer to your Sellers. So you call Mr and Mrs Donhavetuhsell to tell them the good news, and they say (one of the following):

1. Terrific (fill in your name, here)...what a fan-flippin-tastic Realtor you are! Why, it's only been twenty three minutes since you left our home with the signed listing documents, and you've already sold it! You know (fill in your name here), we trust you implicitly...whatever the offer is...tell them we'll take it. And...we can close tonight..if they prefer.

                                                                            -or-

2. Well, that's just grand (fill in your name here). Naturally, we'd like to see the offer, evaluate all of the various terms and conditions so that we can make an informed decision, with your expert advice and professional guidance. Let's arrange a mutually convenient time for Anne to meet with us, in your office.

-or-

3. OK..how much is it? We're not about to waste our valuable time on a low offer.....Ya, know (fill in your name here), it's only been on the market for three (weeks/months/years)..she better have a GOOD offer..because...we don't have to sell

Well, if you've been in the real estate industry for even a short while, you know that #3 is a fairly commmon response..and rightly so. After all, how well are we preparing our seller clients for an offer? What steps are we, the Professional Full Time Home Marketing Experts taking to assure that our clients understand the many nuances of the Sale Transaction (especially the contract negotiations)?

Unfortunately, we're not doing enough.If we were, we'd hear response #2 every time.

So? What DO we do?

You've heard the expression: No one is ever sold anything. They make an informed decision to buy. In other words: if you sell..rather than inform (teach)..you'll get no where. Look at the most successful Realtors in your market...they learn everything about the people, neighborhoods and trends of their area. They also learn what their clients want and need BEFORE they propose a particular service to fill the need.

If our client reacts to an offer as in the above example, it's (often)  because we haven't given them another option..we haven't informed them about the importance of the initial offer, the response/counter offer, "gimmes", incentives and sweeteners, and of course..the Win-Win.

Home sellers must be prepared for their first offer right from the start. From the first day of the listing agreement. Tell your clients that most buyers will make LOW OFFERS..tell them that many people who look, act and talk like buyers..aren't really buyers at all, they're more like fishermen. You know fishermen, sitting on a lawn chair, sometimes on a bridge..sometimes on a stream bank...drop the line in the water..if a fish bites, good. If not, also good. See... with fishermen, it's not the catch-of-the-fish as much as the act of fishing. Same thing with some "buyers"..they look at eighteen homes a week..with nine different Realtors. They'll make an offer on every fourth home they see...not necessarily a reasonable offer..but still an offer.

Our clients need our professional guidance, experience and...this is important..our reasoned, emotion-neutral reaction to anything "the other side" proposes..including very low offers. That's the only way to approach a contract negotiation.

Another important consideration is this: in a real estate market that has become very challenging (especially for home sellers), all parties must understand the concept of Good Faith Negotiations. What's that, you say?

I said... Good Faith Negotiations.

In good faith negotiations...

a. All parties agree to deal honestly with each other (including the Realtors)

b. The Seller will disclose all necessary information to the buyer.

c. The Buyer will provide all necessary information to the Seller.

d. Seller and Buyer will abide by all decisions involving inspections, appraisals and financing.

This point is very often misunderstood by the parties (and, some real estate agents)

e. The contract price is negotiated prior to a fully executed contract. The home inspection is not a means of reducing the contract price further, other than for issues which materially effect the value of the home.

When inspection issues and the negotiations of such get bogged down, or dragged out for days and weeks, one or both of the parties may experience "Deal Fatigue"..the consequence of which is often "BOM" (Back on Market)..or "OTM" (Off The Market). Make sure that any issue which may arise is dealt with..immediately and effectively (you owe your client no less). Make sure your client understands the importance of careful consideration regarding inspection issues, and their quick resolution. for everyone's benefit.

Buyers--legitimate, well-qualified and motivated buyers--are not easy to find these days. When we do find one, we have to do everything we can to keep them in the transaction, for their benefit, and that of our client. If a buyer walks away from a deal because of a minor issue which could have been handled better, you (and your Sellers) may not get another comparable offer--or any other offer. 

Frank Nicolato,CRS,e-PRO,QSC Realtor-Associate

Prudential New Jersey Properties

Edison-Metuchen  NJ

www.EdisonHomesForSale.com         FrankNicolato@PruNewJersey.com

A quick look at the Central Jersey real estate market..in Edison, Metuchen and Woodbridge Township:

February 2008:   Single Family Homes Sales Data    

New Listings   in Edison NJ:   82

New Listings   in Metuchen NJ:  17

New Listings in Woodbridge Twp NJ: 117

Sold (Under Contract)   in Edison NJ:  17

Sold (Under Contract)   in Metuchen NJ: 1

Sold (Under Contract)  in Woodbridge Twp NJ: 75

Closed in Edison NJ:   28

Closed in Metuchen NJ: 7

Closed in Woodbrdige Twp NJ: 26

AVERAGES

Average Closing Price in Edison NJ:  $404,587   77 Days on Market

Average Closing Price in Metuchen NJ: $462,875    94 Days on Market

Average Closing Price in Woodbridge Twp NJ: $337,154  74 Days on Market

Data of: Middlesex County Multiple Listing Service, March 3, 2008. Data deemed reliable, not guaranteed.

Trying to decide on purchasing your first home? Is this the year you stop paying your landlord's mortgage? Well...to help you along, here are a few points to ponder:

1. Interest rates are STILL low....6.20 to 6.5% for qualified borrowers with at least 5% down, gainfully-employed, with documented income and acceptable credit condition.

2. There are a lot of homes to choose from...housing inventories are at their highest levels in years.

3. Many listed homes have been on the market for more than a month (Here, in Central NJ..average Days on Market is anywhere from 50 to 75 days between LISTING*..and UNDER CONTRACT)..and the sellers may be "Very Motivated" to negotiate an offer

4. There are several state and federal government incentive programs available to Home Buyers...(you may get down payment cash from the Feds or your state government. See my webpage on Money Available) http://www.nicolatorealty.com/americandream

5. There are numerous tax advantages of home ownership...loan interest, property taxes and closing costs are generally tax deductible for the year in which you purchase the home (with qualifications). AND....loan interest and property taxes are deductible for every year that you own the property (check with your CPA to verify your status)

6. Another tax advantage: most homeowners who finance their purchase can expect to claim additional deductions on their 1040 in the following year(s)..many will adjust their payroll withholding to reflect this...thereby increasing their usual take-home pay (naturally, you should check with your CPA/Tax Advisor)

7. Home ownership builds communities..permanent residents are the backbone of a town. Towns and cities grow and thrive when the "owners" of the town take an active role in their schools, and in their municipal government that represents them.

8. Home purchases help to expand the local, state and national economies. When one (1) home is sold...the corresponding positive effects are far-reaching. In addition to the home purchase , there are transactions with appraisers, home inspectors, municipal approvals, moving companies, furniture stores, landscapers, painters, decorators, contractors.. Each of these adds even more to the economy..as the home inspector uses his fees to buy a car...the painter can hire additional workers...the landscaper buys his daughter a prom dress..and on and on.

9. Home ownership builds families. A stable home environment, in a familiar place that "We own"..is essential for long-term family growth and strength.

10. Home ownership improves neighborhoods. A simple fact of life: if you own it--you'll take better care of it. Neighborhood homeowners, by and large, are better homemakers (and home "keepers") than many renters. This helps to maintain a neighborhood's character..to keep it "up"..to maintain its overall appeal.

11. Prices may be coming down (more)...Prices may be going up. There's no way to tell. With regard to the price you pay for your home, you have to ask yourself this: Am I buying a HOME for my family...or am I investing in real estate? If you're buying a home for your family, it's very likely you will be living in the home for the next 5 to 7 years (according to national averages). It's also likely to increase in value over the next 5-7 years (long term capital appreciation)..So, is it a home..or an investment instrument?

I know what you're thinking: "This guy is a Realtor...OF COURSE he's going to say "BUY Now". 

So don't take my word for it. Evaluate your situation...talk with your CPA..talk with your family. No one knows your particular situation better than you do. Not me..or Suze Orman..or Jim Cramer...or MSNMoney....or any of the other real estate experts.  

But..if you are thinking of buying a home of your own, include the above info in your decision making process...and contact me if you need additional information about buying (or selling) a home in Central Jersey...in this market.

Frank Nicolato, CRS,e-PRO,QSC   My Edison Real Estate Site

 * Ask your Realtor to verify the history of the particular Listed Property to determine the exact length of time it's been on the market.