Philadelphia Real Estate Blog

How can buyers sweeten their offer in lieu of coming in at a strong price?

*Shorten your settlement date- especially if the home is vacant.

*Shorten your contingency dates- have your home inspection in a week instead of 15 days

*Put more money down ( to be held in escrow- go a full 10% if warranted)

*Add an “As-Is” clause- doesn’t mean you are giving up your rights to inspections- just lets a seller know you will not be renegotiating after the home inspection.

* Write a really nice note about how much you love the seller’s home and why you are buying it

*If a property is vacant- but still has unwanted clutter and dirt- tell the seller you will buy as the property sits today and that you do not expect them to come back and clean or get rid of debris.

Many things in a Philadelphia real estate transaction are not logical, but are emotional. Sweeten that emotional pot and you might find you are going to save a few dollars. Happens more often than you think.

Mark Wade
www.CenterCityCondos.com
Berkshire Hathaway Home Services | Fox & Roach Realtors®
530 Walnut Street  |  Suite 260  |  Philadelphia PA 19106
direct: 215.521.1523  |  main: 215.627.6005  |  fax: 215.402.1044

How best to respond to a super low-ball offer?

I suggest sellers ignore it and pretend it never existed. Do not entertain or respond.

How to best respond to a lower than desired offer?

I suggest you counter in such a way that keeps the buyer engaged, but you don’t give away the farm on your first move. Buyers rarely make their “highest and best offer” initially.

How to respond to a really great offer?

Sign it. ASAP. Do not try to tempt fate or be greedy. Sign it. It is very rare that such a strong offer can or will be duplicated.

1. Change light bulbs- make your home brighter
2. Spend a $1000 or so to touch up all painted walls and baseboards
3. Re-Caulk around the bathroom tubs and showers
4. De-clutter. Then de-clutter again.
5. Clean. And I mean clean- including the outside of your stainless steel appliances, your carpets, your tile floors, your ceiling fans, interior and exterior windows.

If you want the most for your home– you have to put your best foot forward. Kinda’ like going on a date for the first time. This is a dog and pony show….and you wouldn’t go out on a date without flossing your teeth, or wearing clean clothes, or washing your hair would you? Of course not….

1. Lower your asking price.
2. Hire a professional photographer if you didn’t do so initially
3. Further de-clutter and try some fresh paint on specific walls if needed
4. After say 180 days- Personally, I would hire a new listing agent.

Homes do indeed get stale as the “days on market” clock grows. Value has a tendency to decline as the “d-o-m” clock grows and all sellers should be pro-active in dropping their price as time goes on. If you are not allowing your Realtor to do open houses- change that ASAP. Open every other week at a minimum. Install a for sale sign if you have yet done so.

Spending $5,000 to go repairs, upgrades, staging, etc is so MUCH MORE IMPORTANT than dropping your price $10,000. It may not seem logical to you- but look at your home through the eyes of potential buyers. That $5,000 you spend is going to put your home in a whole new light-

A $10,000 price drop may not. This final rule of thumb does not apply if your home is already super duper gorgeous. If that is the case then your only option is to drop your asking price.

Being a confessed Real Estate condo junkie in town for 26+ years gives me a lot of credibility with buyers and sellers who come across my website or are referred to my from friends, past buyers, etc. However, there are a few instances when clients look at me like I am blowing smoke up their ass. And often clients will indeed kill the messenger when these truths needs to be said. Here are a few:

1. Suggesting exposed brick is really cool when painted. It is….and every time I show a condo with painted exposed brick- my buyers flip and fall in love. Especially when it is painted something other than white. But the looks I get when I make a suggestion to a buyer or seller that they should paint their exposed brick. You would think I just told them that I was a leper…
2. Staging Really works. It does….but most sellers think I am somehow out to just waste their money. But buyers don’t usually make logical purchases- they make emotional purchases and they much rather buyer the sizzle than the steak. This is pretty much Real Estate 101 though sellers rarely believe me.
3. Letting a buyer know when they need to pay full price for a condo. And this is probably the most difficult for me as well. Sometimes a condo comes on the market that is going to sell THAT DAY- and I know it for a FACT. But getting buyers to believe me is another story. Sometimes they think I am just making that part up when in fact I am telling them the truth. I don’t say it often because 95% of the time, a condo is NOT going to sell that day for full price….but on rare occasions it does happen.
4. Telling a seller that their first offer is their best offer. Almost always the case. But many sellers think there is a better offer just around the corner. In reality, a growing “DOM clock” (days on market) means listings can grow stale and can do so fairly quickly. I can’t tell you how many times a seller has rejected a first offer only to have their unit sit on the market for an extended period of time. More frequent than you might imagine.
5. Telling a buyer that they really are not going to walk as much as they think they are when they move into Center City. It is hard to tell buyers too…most suburban buyers think that they are going to become walking fanatics and never use their car again. But there is no way in hell someone buried deep in Fitler Square is going to walk to the movie houses at 2nd and Walnut. It just isn’t going to happen. Sure- you will walk more than you USED to….but you aren’t going to magically change your life and walk everywhere. I usually try not to tell people this as they take that truth out on me. They do.

So if I say something you don’t want to hear or don’t believe…then take it with a grain of salt. You may then find out for yourself. No hard feelings!(aka- don’t kill the messenger)

I have been interviewing buyers for nearly 27 years concerning their wants and needs. When I do an initial interview with condo buyers, I hear a laundry list of things that are important to them. Here are the most common requested items:

1. Specific Bed/Bath count
2. Parking
3. One level living
4. Move-In condition
5. Pet-Friendly
6. Natural light / Views
7. Walkability to area restaurants and events
8. Den
9. Outside space
10. Pool/Gym

What surprises me the most about a buyer’s initial wish list when compared to what they actually end up buying?  Almost anything on this list can and does fall by the wayside when a buyer sees something they VISUALLY love. Except # 5. If that is on the list, that wish/need does not go away….ever.

There is an old adage that Realtors love to throw around and that is:

“Buyers Are Liars”. No they aren’t- they generally are just not aware of the options that exist in the Center City condo market. And that is where I come in….

I have been lugging buyers around in my car here in town for nearly 27 years now and like snowflakes- no two buyers are the same. However, if I had to generalize and put buyers into categories, here would be the most common types of Center City Condo buying groups:

1) The Returnees – Grew up in Philly, moved elsewhere, and are now returning to their roots. Being close to friends and family is often the draw- or perhaps being close to where they grew up or went to college is often the motivation behind their return to town.

2) The Empty Nesters- Aka- those looking to shed lots of unused house…. They can often be very happy buyers who are starting a new chapter in their lives. I enjoy working with and watching these buyers get excited for a move into town. These buyers are looking to simplify their lives and lessen their responsibility in terms of home ownership. Generally “turn key” buyers who want to do zero work. One level living tends to be a priority as do high rise condos with doormen.

3) The Weekend Warriors- They have done the shore and now spend their weekends in town. Much more common than you think. These buyers generally do not buy townhouses nor do they buy the large 3 and 4 bedroom luxury condos. Usually buy just enough space to have friends over for dinner or overnight.

4) The Kids Who Have Parents Who Have $$ – Very common. Very. Usually here to attend school or start their careers. I find proximity to work or friends plays a heavy hand in where they end up buying. These buyers are also generally turn key buyers who are not interested in doing work to their new condo..move in condition  important.

5) The Transferee- Maybe came to town via a promotion or transfer and wants to be close to work. Moving to town wasn’t on the radar. Doesn’t matter- he or she is here now and the suburbs generally are not on their radar.

6) The Growing Families- Aka the move-up buyers. It used to be that young adults would get married , get a dog, two kids, a station wagon, and BOOM- off to suburbia they went. No longer the case. They now often represent our move up buyers in Center City and gravitate towards single family living in areas like Queen Village or say Art Museum area (in my opinion).

7) The Investors- Those who know that the city is the place to be and that their investment will provide a handsome return year after year after year. A condo may is usually preferred by such buyers as the lack of maintenance is often a goal.

8) The First Timers- The good ole reliable first time buyer. The backbone of the Center City condo buyer. Always has been and always will be.

Let’s say you have a condo to sell at say The Philadelphian 2401 Pennsylvania Ave. and you strike a deal with a buyer.  You then have to pack up, hire a moving company, etc etc.  That is a lot of work for any seller….and the stress can be equally heavy.  And the one question on your mind is whether or not the deal is going to implode along the way.

It happens- more often than you may think as there are many potential bumps in the road from the home inspection to the mortgage process to the condo doc review period.

How do you know if this is going to happen to your deal or not?

Truth be told…it all comes down to one thing: DOES THIS BUYER REALLY REALLY WANT YOUR CONDO?  Because if he or she does…they will make it happen. They will suffer the perceived injustices of the home inspection. They will roll with the bumps in the road in terms of the mortgage. They will put up the curveballs that inevitably come down the pike. IF they want your condo- they will make it happen.

I see it all the time. Your buyer’s motivation level is the barometer for a successful close to the transaction- If the buyer wants your condo bad enough- he or she WILL make it happen and will put up with everything thrown in their path to ownership of your condo. They will tolerate the fact that your heater is older than expected, your electrical service is a bit out of date, the mortgage company tells them they have to put MORE money down, etc etc.  IF they want it bad enough, they will roll with the punches.

When a great condo at a great price hits the market, there can be some serious competition to buy that condo- at say Penns Landing Square condos. Buyers duking it out with other buyers. Here are my top secret steps to winning a multiple bid situation for my buyers…. if my buyers agree:

1. I make sure I dot my i’s and cross my t’s in the offer itself- sloppy offers beget sloppy responses.
2. I call the listing agent and ask specifics that will fit the seller’s need- Like what would be the perfect date for the seller to settle?
3. I have the buyer write a nice note about how much they love the condo they are in contention for and explain why they are making the offer. Sounds silly- but that little trick goes a long way.
4. In that note (see #3 above) I have the buyer’s explain that they have seen the age of the heater, the age of say the kitchen or the windows and let the seller know that these factors were already taken into account and that the buyer does NOT intend on coming back after the home inspection and attempt to have the seller repair the items that we ALREADY know are potentially deficient.
5. Finally, I find out who the listing agent uses for a mortgage and title company. Then I get a prequalification letter from THAT mortgage company. In essence, it turns my buyer’s offer into a cash offer as listing agent will have NO qualms about my buyer’s ability to qualify for a mortgage. And if we have to use the seller’s title company- then so be it.

One of the biggest hurdles I find for empty nesters moving into Center City is the chore of downsizing. A recent client of mine found a professional downsizer. I was amazed at how he helped her out of her large 5-bedroom home into a smaller two-bedroom condo at 1326 Spruce St. Here is what she had help with:

Some of the things Ed does:

He goes through the house and has me identify any big items like furniture, carpets, etc. that I will take to the condo, measures the items, takes photos to which he adds numbers to identify each item.  He produces a large diagram of the condo and gives me pages with squares, rectangles, etc. indicating each item by the number and representing all the items that I am planning to take, the sizes in proportion to what they would be in the condo.  He then asks me to decide where each numbered item goes.  This is terrific, because you can tell, for example, in what room and where A carpet or chest will fit or realize that an item – like my twin bed on the 3rd floor – will not fit and plan the arrangements accordingly. He identifies an area (like the basement) or a category (like books) that is the focus. He confronts me about stuff, forcing me to make decisions about what I must take, what I am ready to discard, and what I need to think about.  Like a demon, he then organizes everything, packs stuff for the condo with care and with speed – putting on labels indicating where things go, takes anything to be discarded to a thrift shop or similar.

On his own, he zoomed through the basement, sorting through everything in a flash.  You would not believe how quick he is and how EMPTY the basement now looks. This is an invaluable help.   A great find. Here is his contact info:

Mischa Greenberg

President

Serving Philadelphia, and the Tri State Area

mischa@moves-made-ez.com