Podcast - 4/5/24

🏡💡 Ready to Make Your Strongest Offer? Here's How! 💡🏡

Buying a home in today's competitive market can feel daunting, but with the right strategy, you can stand out and secure your dream home. Here are four tips to help you make your strongest offer:

1️⃣ Partner with a Real Estate Agent: Work with a local expert who can provide valuable insights and guide you through the process. Having a professional by your side gives you a competitive advantage.

2️⃣ Understand Your Budget: Get pre-approved for a mortgage to understand your financial limits. Sellers are more likely to consider offers from pre-approved buyers, giving you an edge in negotiations.

3️⃣ Make a Strong, Fair Offer: Avoid lowball offers that may offend sellers. Trust your agent to help you find a price that's competitive yet fair, increasing your chances of acceptance.

4️⃣ Trust Your Agent During Negotiations: Flexibility is key during negotiations. Trust your agent to navigate the process and help you craft an offer that meets your needs while appealing to sellers.

Remember, the right strategy can make all the difference in today's competitive market. Let's work together to find your dream home and craft a winning offer! 🤝🏠

And don't miss our insightful discussion on closing costs for homebuyers in this week's podcast! 🎙️💰

🏡 **House of the Week**: 33 Mason Dr, Harpers Ferry
💲 Price: $615,000
📅 Open House: Saturday, 12pm to 2pm

Experience the tranquility of riverfront living with this stunning property nestled on the banks of the Potomac River. Featuring 3 bedrooms, 3 full bathrooms, and a 2-car garage, this home offers the perfect blend of comfort and luxury. Don't miss your chance to explore this breathtaking home at our open house! 🌊✨ #RealEstate #HomeBuying #OpenHouse

Tom Whalen:

I'm Tom.

Jay Day:

I'm Jay.

Tom Whalen:

of Jay Day and the Day Home Team at LPT Realty with our weekly real estate podcast. Jay, a questions come up in my head reading all the success stories on the air, and that is we wrote a strong offer against dozens of other offers and it came through. What makes a strong offer?

Jay Day:

Well, you know what? That is a common theme on our success stories.

Tom Whalen:

I mean, is it just the amount of money or is it circumstances?

Jay Day:

No. So I'll give you a couple tips. One, you definitely want to partner with an agent who knows what they're doing and knows how to negotiate. Not all realtors are created equal. Not all of them have the negotiation skills, and that's where the problem comes. A lot of them go to, it's all about the dollar or it's, it's all about whatever, because they don't understand how all that works. So number one is you have to get an expert negotiator as your realtor to help you through the negotiations. Two, you need to know your budget. So sometimes people get hung up on, I'm not paying this. I'm not paying X amount for this house, or from a seller perspective, I'm selling my home for Y. Well, you need to understand the budget and the specifics. When you're buying a house, it's what is that monthly payment? Or sometimes people can get wrapped in their head, well, this thing's listed for 500,000. There's no way I'm paying 510. They walk in, it's the perfect house, and in their head they're, it's $10,000 or more. I'm not doing that. What is the payment? Is the payment $17 different a month? Is that house after you've looked at everything else? Not worth an extra $17 a month. So you've got to look at things with a different lens, making the strong offer. The strong offer consists of, well, one, your agent should be chatting with the listing agent, and the first thing that a good agent does is they ask, what is the seller looking for? Do they need a post settlement occupancy? What is the most ideal closing date for them? You get into all of these things so that you know how to tailor and create your offer that's going to be in the best light for the seller. I had one recently where they wanted to close and wanted to be able to stay in the house for 30 days after they didn't want to do a back-to-back closing, moving somewhere else, and if something were to happen that would screw up their closing on the other house. They're like, if we could close, I know I have my money and then I'm just sitting and waiting to be able to make the final move. That would be a total win for me. Their situation, it wasn't about the dollar amount. It wasn't at all. So we had three offers on that one house, and I'm going to give a little bit of a layout. One of them was just a ridiculously bad offer. It was under asking, and the home had only been on the market for two weeks, and they had multiple inspections, and that was the first thing we had. Then offer two came in, offer two was over asking. They did need some seller concessions, however, the net numbers looked good, and they only wanted to do two types of inspections where the other one had a little bit more. Then we had another offer that, and I'm sorry, that offer, the first one, they wanted to close and not do a post settlement occupancy, so they were negative and all lower price, more contingencies and didn't want to allow them to stay.

Tom Whalen:

Out of the house!

Jay Day:

Yeah, that was done. So the second one, like I said, offered more but needed seller concessions, and again, not a massive amount. The inspections were a little bit cleaner. It was just like a regular home inspection and I think a pest inspection. They were willing to close when the seller wanted to and gave them 30 days of living in a house at no cost.

Tom Whalen:

Nice offer, a little bit better offer there.

Jay Day:

And the other one, the people were putting a whole lot more money down than the second people, but those terms seemed good. Then we got a third offer that came in, the third offer that came in, they offered asking price waived all inspections and were willing to let them have the rent back for free, and they didn't do any inspections, anything. So on that one, it was clean as far as there was no inspections. They were willing to let them stay there for free and close when the seller wanted to close. So the seller had a decision to make. Do I think that there is, well, two things. The one, they had a higher price, but they needed concessions. If the home doesn't appraise, are they going to net a lower number because they need those concessions. The second part is are there enough things that could come up in a home inspection that would offset that difference in what they were making from that offer versus the other? So it was sort of a back and forth, but I will tell you in that situation, the agent for offer two had communicated with me and asked me exactly what the seller wanted for timeframes. They tailored their agreement to basically match everything that the seller wanted, and the seller was like, my house is 10 years old. I'm not worried about an inspection. Come and inspect it all day long. I'm not worried about a darn thing.

Tom Whalen:

This is okay.

Jay Day:

They really, so the waiving inspections didn't make as much of a difference to them. So again, what's the key to that one, they had a good agent that understood everything. The agent actually also had their lender call me. When their lender called me, I talked to the lender and said, hey, if this house doesn't appraise, does that person, are they still approved without the seller concession? And he said, he hemmed and hawed, and he goes, absolutely they are, but they really want it. I'm like, no big deal. My people aren't going to care if it appraises. They don't care that they get the concession. They're fine with that, but if it doesn't appraise, we need to know, is this deal dead or is it negotiable where we could go back and say, hey, we wanted to do it. You bumped the price, but now that's not going to work, so we got to, we're not going to give you the concessions, so we need to lower the sale price. So just those little pieces alone are key because, and another part of it, when you're looking in an area, you need to have your agent educate you on that area. I can't tell you how many times we'll have someone, they're like, man, this is ridiculous. I'm not going to waive inspections. I'm not going to pay over asking, well, there's a way that we can very easily get you the odds of this happening, and I'm going to use New Market as an example. In New Market, certain pockets, almost everything sells for over asking. The majority of the offers do not have any inspections. So you need to prepare your buyer. Your agent should be educating you and saying, hey, I know you want to be in this area. However, here's what you can expect in this area when you're writing offers, and we can pull real data. Okay, so you want to be, or let's even say Spring Ridge, you want to be in Spring Ridge, no problem. You want a townhouse. Well, over the last three months, here are how many town homes came on the market here? How many sold? They sold for 8% over asking price? And we can talk to the agents and see if there was any contingencies or we could say, hey, they all had multiple offers. So you're going to be competing. You're going to have to pay more than asking, and you're probably going to have to waive inspections. If you don't like that, then realistically, you probably need to look in a different area because the data does not lie.

Tom Whalen:

I would appreciate that kind of honesty and making a big decision like this.

Jay Day:

Yeah, it's really, really important, and I mean, that's a key part in my opinion. I think the challenge in our industry, our last podcast talked about some lawsuits and things. I think all of that stuff comes about because there's a lack of education and there's a lack of consultation that has been happening on the buyer side of real estate transactions. My wife calls it Pop-Tart agents where the agent gets a call, they jump up out of the toaster and they go open the door.

Tom Whalen:

I understand.

Jay Day:

They have no clue what their point of why their person is moving, why they like that house, what had them call about that house? Nothing at all. They're just jumping and running, and how can you serve your client in their best interest if you've talked to them on the phone for two minutes and then you would go and you open a door, you don't even know them. You have no clue. Remember when I was helping you guys, a lot of time was spent sitting down, what is the goal? What are we trying to achieve.

Tom Whalen:

Discussions? Yes. I mean, the long discussions.

Jay Day:

Yes. And then the,

Tom Whalen:

It is a huge decision.

Jay Day:

And then the, hey, are you guys okay with trying to do this? Let's talk about the pros and the cons. Okay, okay. It looks like there's more cons, so let's see if we can find a way that you guys can be close to each other, but not be, and again, you get into all these things, but if I didn't ask you that, I would've had no clue. I would've just been opening doors. And I mean, I remember you and I talking because at one point you had some family that would come into town, and we were trying to find something that had a bedroom on the main level and the bathroom in case it was needed, but we realized we couldn't find it. So then it was not with everything that matched. So it was like, okay, so how often is that going to happen?

Tom Whalen:

Yeah, exactly. Not that often, if ever.

Jay Day:

Yeah, but it was an important thing to know because you thought that was a must have, and sometimes things are a must have, and sometimes in our head we're like, of course I want that because I want them to always feel welcome. You could stay that someone in your family is welcome at your house anytime, but if they stay there three nights a year to make a huge decision based on a three night situation,

Tom Whalen:

I understand.

Jay Day:

Yeah, and like I said, I don't mean to be personal and bring some of the stuff in.

Tom Whalen:

No, that's fine. I know that's making a good point.

Jay Day:

But it's an important part, and like I said, if we don't know, if we don't understand and we can't help you, and we have to come to this as a point of wanting to help our clients and to help them, we need to understand them. We need to understand what their situation is.

Tom Whalen:

I have another question for you, Jay.

Jay Day:

Okay.

Tom Whalen:

When you're, I know that in real estate transactions, buying or selling, everybody wants to get to close, close, close, close is the big word, but there's another scary word involved. Closing costs. Oh

Jay Day:

Oh yeah, you add the cost after closing.

Tom Whalen:

Well, it means you're there. I'm there, new home, ka-ching, ka-ching. What is closing costs? What is that all about?

Jay Day:

Roughly your closing costs consists of government recording costs, appraisal fees, credit report fees, lender origination fees, title service, tax service fees, survey fees, realtor fees, attorney fees.

Tom Whalen:

Can all this be,

Jay Day:

Underwriting fees

Tom Whalen:

before the close? Why does it all have to come up then?

Jay Day:

Well, it doesn't come up then that's when you have to bring the money. That's when you have to wire the funds. A good agent will get you in touch with their lender and you will work out all of these fees and know what your costs are before you even walk through the door of a home. That is part of our job. Again, it goes right back to the agents doing their due diligence. When we talk about Frederick, and we'll just talk about Frederick real quick. If I'm showing a home in Waterside, and I don't know if you know Waterside is right outside of, it's across from Giant. So I could show a townhome in Waterside, and then I could just drive up a block and show a town in Worman's Mill. Well, Waterside is not in Frederick City, so their taxes are lower. But if you walk one block, I mean, you can see Worman's Mill from Waterside. If you go to Worman's Mill, all of a sudden your taxes are going to go up dramatically. So if your agent doesn't explain to you, hey, when we're looking at a home here, your mortgage payment is going to be extremely different than a block away because of your real estate taxes. Or let's say someone's like, oh, I want to be downtown Frederick, but I don't want to be downtown. So they're like, I'll go to East Church. Well, East Church is considered part of the city of Frederick as well. The taxes are much higher, and you need to know all of this so that you're not surprised. You need to know even before you write the offer.

Tom Whalen:

Okay, so I guess my point is there's no surprises at closing costs with you guys.

Jay Day:

No.

Tom Whalen:

You know what that's going to be because it sounds like a scary term.

Jay Day:

And it is because again, there's just a lack of education, and I understand moving quickly and helping people quickly, but part of that is taking the time and effort to understand and to educate them so that they know. If I say to you, because they're like, wow, why would you have not sent me this house over in Renn Quarter? I'm like, well, it's new construction. It's city tax, and the taxes are probably going to be $11,000. And you said you wanted your payment to be X. Yes, we looked at homes that are priced in that same price point. However, those real estate taxes were $4,500, not $11,000. So either you need to change your budget or you need to be say, oh, okay. Thank you, Jay. You're right. I don't want to pay to be in the city, but you need to educate them. Why, do I say, you shouldn't go there? I don't care where you buy, but if you tell me that you only want to pay X amount of dollars a month, and I know that that payment for that house that you want to see is going to be y, I need to educate you and tell you beforehand, if you told me you wanted to be at $3,800 a month, this one's going to be at 47. Are you okay with that? And if you say, yeah, I'm like, okay, great. Not a big deal. Well, let's go do it. But if you're like, that's what you call the pros. Yeah, but most of the time people are going like, oh, really? For a townhouse? I don't know if I want to do that. And I'm like, okay, that's totally up to you.

Tom Whalen:

Okay. That's why you call the pros.

Jay Day:

Alright.

Tom Whalen:

Hey, those closing costs, that's a negotiable, right? Between the buyer and seller?

Jay Day:

So yes, sometimes you can get the seller to offset and pay some concessions. Transfer and recordation standard is split 50/50 between the parties. The real estate commission as we talked about, that's negotiable as well, where that money comes from. Some of the things that are not negotiable, your lender is going to charge you the appraisal fee period. However, all of the fees that are associated with the lender, like the credit report, some lenders charge different fees. So if you have two estimates from different lenders, you can see what all those fees are upfront. And like I said, how we try to do things in our business. Sometimes people get upset about it, the public does, but they don't realize we're trying to do it for their best interest. We're like, we want you to talk to the lender. We want to run numbers on two different houses that you like so that you can see what those payments look like. And then you can make an informed decision of, am I comfortable with this? Because let's say that someone's considering between, they're looking over in Washington County and then they're also looking at Falling Waters, West Virginia, and we look at homes that are around the same price. Let's look at what that monthly payment looks like and what your closing costs look like. And you may decide you want to go over the river because you're like, wow, that's a whole lot cheaper. Even though the sale price is the same. Again, it all comes down to what that monthly payment is and also how much closing costs you're going to have to pay and bring to the table.

Tom Whalen:

That's why you called these guys. You got a home of the week?

Jay Day:

I do. And I ventured over the river, not on that side, but we've got 33 Mason Drive and Harpers Ferry listed for 615,000. This home, before I get into details, is also going to have an open house. Open house will be Saturday from 12 to 2, and I don't know what it is. I've got two back to back weeks. This is what our front property as well. So this is right on the Potomac. It's nestled on the gentle banks, the Potomac River. It's 0.69. Lush acres split across four parcels. This is true waterfront. You have three parcels that are on the Potomac, so you could set your boat up, do your thing. Great spot. Three bedrooms, three full bathrooms, a two car garage. You have a family room with cathedral ceilings, exposed beams, a fireplace, partially fenced front yard. Again, I said it was riverfront. The deep water access, there are two covered front porches that overlook the Potomac. So they have it where you could get it off of the upper level or you could sit down the lower level and just sit there and take in the water views. They have a wood stove, kitchen island. This is pretty unique. They have an attached greenhouse. There's a greenhouse attached to the house. That's awesome. Pretty cool looking. There's also a really neat upper level library/office with built-in bookcases. Cool looking property. If you go to wfre.com, look up Tom and Jay's Real Estate podcast. There's photos. We also have some drone photos so you can see how close it is to the water. If you like what you see, let us know. Getting in a waterfront property with four different parcels right on the water for 600,000, well 615, that's a sweet deal. If you've saw anything like that in Maryland, it's going to cost you a whole lot more money.

Tom Whalen:

That's why you call Jay.

Jay Day:

All right, you have a good one.

Tom Whalen:

I'm Tom.

Jay Day:

I'm Jay.

Tom Whalen:

Jay Day and the Day Home Team at LPT Realty. Thank you for listening and tell your friends all about it.

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