Yes, homes are typically selling quickly. In some cases, homes are selling $50,000 or more above asking.
So of course, most people are thinking that it can’t get any better for Sellers. But what if I told you it could? I’m seeing missed opportunities left and right in this market because Sellers may not be fully informed. More importantly, they may not be working with the right agent who understands how to best negotiate for them.
Here are three ways Sellers may be missing out on the best price and terms for their home.
1. They don’t counter everyone. I’m seeing multiple offers come in and the Seller just picks the best one. However, why not counter everyone or at best the top 3-5 offers that have the highest probability of success. On one of my recent listings, I had offers 13 offers as high as $55,000 above the list price. I still countered all of them (even with more offers coming in afterwards). What happened? I got my Seller another $31,000! That would have been money left on the table that my Seller never would have seen. You will be surprised where buyers end up if given the opportunity.
2. They go with the one with the biggest down payment. It is a complete myth that someone putting 20% is more qualified than someone putting 5% down. Some people are putting 20% down because that is the only way they can buy the place. In theory, someone putting 3%-5% down could be more qualified. For anyone getting a mortgage, the process is the same to obtain the loan and the appraiser doesn’t care one way or another. Therefore, you shouldn’t always go with the one with the biggest down payment, but rather the one that has the best price and terms with the highest probability of closing.
3. Because of the way the market is, selling off market may not be the best option. There are pros and cons. The biggest pro to selling off market is the convenience. You won’t have over 100 people walk through and you can move on with your life. However, there is a chance you are missing out. Remember that listing I mentioned in point #1? We got an offer as a “Coming Soon” listing for $20,000 above list. Because my Sellers didn’t take it, they were able to get $66,000 more and the buyer who got it waived their appraisal contingency.
Of course, every submarket is different. Some areas like Downtown Los Angeles are seeing high days on market. Therefore, some of these strategies may not fit. But for the majority of Los Angeles, you may want to think about the above points before you jump the gun and accept the first offer that comes in.
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