Making Good Offers When Buying Jersey Shore Real Estate
The current Jersey Shore real estate market is challenging for both buyers and sellers. Many sellers have not accepted the fact that their home has decreased in value and are trying to sell at peak 2006 prices. At the same time, buyers want to make sure they don’t overpay, fearing prices will continue to drop even more.
Of course, there are exceptions. Well priced homes in desirable neighborhoods or foreclosed properties selling at ‘yard sale’ prices may generate multiple offers. But all in all, it is a buyer’s market.
So how do Hersey Shore home buyers prepare to make an offer and put themselves in the best negotiating position? Here are some suggestions made by Dian Hymer in a recent Inman news article:
1. Before you make an offer on a listing that’s priced over market, try to find out as much as possible about the sellers’ motivation, and if there’s any flexibility in their price. If the seller owes more than the house is currently worth, they may not have any negotiating room. They may want to sell the house, but really can’t sell at today’s prices. A lot of time and emotional energy goes into making an offer. Save your efforts for listings where the sellers are motivated. That is, they don’t just want to sell — they need to sell.
Some sellers want to test the waters at a price that’s higher than the market will support. They usually feel that someone will appreciate the added value their home offers and pay more for it. However, these sellers will often negotiate with a legitimate buyer who offers a price that is less than the list price.
2. Make sure that your financing is in order and that you are able to show the seller that you are capable of closing the deal. The fallout ratio is high in the current market. Many of these transactions fail to close because the buyers couldn’t get financing.
It’s always a good idea to be preapproved for the financing you’ll need to buy a home before you make an offer. Preapproval involves making a formal loan application, having your credit checked, as well as verifying your funds for down payment and closing costs, and validating your income and employment. Lenders often want to know that you have enough surplus cash to make house payments (mortgage, property taxes and insurance) for two to three months.
3. Buyers who make an initial low offer and who aren’t in competition should make as clean an offer as possible. This means omitting anything that’s not necessary. However, you should include contingencies for loan and appraisal approval and an inspection contingency.
It’s a good idea to include a copy of your preapproval letter with your offer. If you are approved for a higher price than you are offering, ask your lender or mortgage broker to issue a preapproval letter for the price you’re offering.
4. Be prepared to negotiate. It may take several rounds of counter-offering back and forth to reach a mutually acceptable price.
Are you thinking about buying Jersey Shore real estate? We are glad to help you with your preapproval process, show you homes with motivated sellers and craft an offer putting you in the best possible light with the seller and results in getting you the best possible deal.