Our next podcast discussing buying and selling in the current market!
Today Marcia and I are explaining different buying strategies that investors use and which approach you may want to take.
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
Buying & Selling in the Current Market – Part 4
René Nelson: You are in for a treat. You have Ms. Marcia in the house today and she is a rockstar when it comes to negotiating and strategies on how to win when you’re going to buy a property. So let’s talk about FHA and VA, and just those different strategies that a lot of buyers, they want to use those to get in with little money down, but you’re in such a tight market, so what are you seeing for that right now?
Marcia Edwards: You are in a tight market and you’ve gotta be as attractive and bullet-proof as possible. So I was going to look and say, “This will close if I give this person the opportunity” which means that far-reaching financing is more difficult to close. So if you can get some equity in there and go conventional, that has broader appeal to sell it. Whether it’s perception or reality, unfortunately, VA and FHA are perceived as high maintenance lenders on the lending side.
René Nelson: Okay. And years ago, a seller used to have to pay a certain portion of VA required closing costs, but I understand that that’s now out, right? You don’t have to pay any portion as a seller?
Marcia Edwards: That’s correct. Actually, it’s interesting because some of the offers coming are… Make it very easy on the seller saying, “Hey, you don’t have to prorate the taxes to the date of closing, we’ll give you the taxes that you would pay us to be prorated correctly, or we’ll pay for the title insurance ourselves or escrow fees.” So people are really trying to make it easy and turnkey easy for a seller to hand them the house.
René Nelson: Tell me a couple of nuggets of what you’ve seen with sellers where they’ve said, “Oh, that’s enticing, I’m going to look at that offer over other offers.”
Marcia Edwards: Well, if you don’t have a stellar house to be able to say, “I understand the condition of the property,” is important. That does not mean that you go with that, you waive the contingency of inspections. I’m not an advocate of that. It does happen and it could be the case that you have the comfort of doing that as a buyer but I wouldn’t advise it to most buyers. However, you can get the seller’s property disclosure, the lead-based paint disclosure, and make sure that you know what you’re talking about.
So you want to make sure that you have a conversation that says, “I will be reasonable in regards to the repair inspection request,” because there’s a second window that you could negotiate. After you’ve got it off the market, all the other buyers have left the seller except maybe one is in back up or two is in back up, two of them are put in back up. So now you’ve got an opportunity where you’ve got the property where you could be by yourself and negotiate aggressively on repairs and the seller needs to know that you’re going to be reasonable.
René Nelson: And do you see aggressive negotiation during that repair review?
Marcia Edwards: Yes, I do. It’s interesting. Because the other opportunities are off the table for now, you’ve got breathing room when you go back and you come up swinging, some buyers do. It doesn’t serve you well because there’s usually a back up offer that’s waiting in the wings. It is a strategy out there.
If you’re looking to expand your real estate investment portfolio, René is here to help. Schedule a 15-minute discovery call to better understand your investments and the market today.
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