Posted on July 24th, 2010 No comments
If you are the first person to answer the question correctly, you will win a $25 gift card from your choice of the following: Coffee Bean, Starbucks, Home Depot, Target or Barnes & Noble.
Here’s the question. (Post your answer below):
When does a buyer risk losing his good faith deposit?
Posted on July 21st, 2010 No comments
When you make an offer, it’s not always just about the sales price. There are plenty of terms that the seller will take into consideration when selecting a buyer. Here are some terms that can make or break a deal. First, the size of the down payment needs to be considered. Is this buyer going to have a hard time getting a loan? The ideal buyer is an all cash buyer. The seller does not have to worry about the bank giving loan approval. If there is a loan, the smaller it is the better. Conventional financing is much easier to secure than a jumbo loan. Second, is the buyer well qualified? This goes hand in hand with the down payment. If the buyer has substantial assets, and a low debt to income ratio, then there is a better chance to secure the necessary financing. Or if there is a hitch in the loan, it may be possible for the buyer to come up with more money. Third, the buyer’s contingencies and the length of the contingency period are crucial items to consider in an offer. The more contingencies in the contract, the more opportunities the buyer has to cancel. So a more attractive offer is one that does not have as many contingencies or the contingency period has been shortened. Fourth, if the buyer asks for any seller concessions, it weakens the offer. The more the buyer asks for, the less likely the seller will want to accept the offer. And if the concessions have a dollar sign in front of them, it will only serve to reduce the offer price in the eyes of the seller. Last, how long is the escrow period? Each seller will have a preference for a long or short escrow, but normally the shorter the escrow the better. Again, a long escrow just leaves more opportunity for the deal to fall through.Of course, markets are not created equal. Depending if we are in a buyer’s or seller’s market will help determine how negotiable a seller will be. But when a seller is comparing one offer to another, these are definitely some of the points of comparison.I’ve heard some buyers complain that they offered a sales price that was ultimately higher than the final price at which the property sold. Keep in mind that a lot of things go on during an escrow period. It’s always possible that a buyer made a highly competitive offer, but then negotiated the price down based on the home inspection or the appraisal. Or the winning offer may have had other terms that the seller found attractive and just as important as price.