When Should You Accept A Low Bid?

If you are selling your home and are motivated to get the deal done quickly, you may be tempted to accept a low bid. Whether you need to sell because you are being relocated or need to downsize to save your financial investment, there are several things you should consider before accepting a bid that is below your asking price. Here are a few tips on making that decision a bit easier.

How Motivated Are You?

The decision to accept a low bid should always be influenced by your actual financial position rather than simply wanting a quick sale. If you are in a situation in which you may lose your home due to foreclosure, accepting a low bid may be your only option. If, on the other hand, you are simply tempted to take a low bid because it is more than you originally paid for the home, you may want to reconsider. For most people, the motivation will lie somewhere in the middle, and balancing your motivation to sell and the potential financial loss of accepting a low bid should be carefully evaluated.

Avoid Becoming A Motivated Seller

The best way to sidestep having to take a low bid is by avoiding the position of being a truly motivated seller in the first place. If you are having trouble paying your mortgage, be sure you have exhausted any refinancing options that may exist. Another common reason people feel obligated to accept a low bid is that they have already purchased a new home and do not want to be in the position of paying two mortgages at once. So before purchasing a new home, first sell your existing home.

No matter your reason for considering accepting a low bid for your home, be sure you get the advice of both a REALTOR® and a financial advisor to ensure you are making the right decision. 

Have more tips? As always, I look forward to hearing your thoughts!

Be well,

Rhonda

PS. Thinking of buying a home or selling yours? I'd love to sit down and talk with you about the process and the market. You can reach me anytime at 401-326-2928. 

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Decisions, Decisions...a quick guide for first time home buyers

Buying your first home is both exciting and a little intimidating. The thought of your very own place is thrilling. You can already imagine exactly how you will decorate from choosing the perfect paint colors, to selecting the furnishings that truly match your style.

On the other hand, it can be a little scary. Once you've found your dream home, you are faced with trying to understand everything that goes along with the arduous process.  Negotiating a price, getting through inspections, securing financing, working with your attorney regarding title work, closing statements and finally getting to the closing table can be downright exhausting. Luckily, there are professionals that can help you each step of the way. Your real estate agent or broker is a valuable resource and can connect you with reputable professionals for each task at hand. There may certainly be bumps along the road, but that's OK. With a little patience and some good old fashion perserverance, you will be a proud homeowner before you know it!

But of course, before negotiations can get  underway, you have to choose your new dream home.  Currently in this market there is an abundance of inventory. You can spend days, weeks and months looking at properties in just one area alone, never mind if you have two or three other locations that might interest you.  It can become very overwhelming and you could end up in a massive state of confusion. Like Mom always said, a little preparedness will go a long way. Taking some time before you start looking at properties, and putting together a simple plan of attack will save you time and sanity in the long run.

The first crucial step is identifying your price range. Talking with a mortgage professional can help determine what you can comfortably afford. Then, determine a few basic features you might be looking for in a home, such as location, number of bedrooms, baths, and lot size. Now you have something you can build from.

During this process, you are going to learn a lot about yourself. In the beginning, you may feel like you only want to look at a Cape Cod style home, but in the end, find that you like the colonial or ranch style much better. You may start out thinking that you want a move-in ready home, but in he end, realize that you don't mind putting in some work to keep the cost down and being able to choose the color of your counter tops, cabinets and floors.

As you view the interior of various properties, you will quickly realize the things that are must haves, and the things you might be willing to compromise. This will continue to help narrow down the search. One of the most important things to remember is that the perfect house does not exist. You very well may have to forgo the finished basement for now, but be able to have that two-car garage you've been dreaming about. 

And then, one day, it will happen. You will walk into a house, fall in love, make an offer, and enter the ring. We can save the negotiation process for another day, but regardless of whether your offer is accepted or not, you've learned a ton just going through these first steps.  Even if this particular house isn't meant to be, you will be well equipped to continue your journey to find your new home.

As alway, I welcome your feedback and thoughts.

Be well,
Rhonda

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Functional Obsolesence - what is it and can I do anything about it?

Functional Obsolescence is defined as "loss of value from all causes within the property except those due to physical deterioration".  Huh?!

In understandable terms, Functional Obsolescence is a defect in a property that affects the property's utility. For example, there is only bathroom is located on the second floor of the house. Or perhaps the house has no formal dining room or if it does have one, it's far removed from the kitchen.

Functional Obsolescence can be either curable or incurable.  It is considered curable if the amount of money invested to remedy the issue increases the market value of the property by at least that much. On the other side, it is considered incurable if the cost to remedy the issue is greater than the added value the remedy will bring. 

So, what does this mean for buyers and sellers?

If you are a buyer, be aware of shortfalls in the dwelling's utility and factor in the associated costs to fix those shortfalls when making your offer. Your real estate agent or broker can connect you with the right contractors in the area in order to get an idea as to what it might cost you to address the issues, and can then help determine if your return on investment will be worth it. 

If you are a seller, you need to be aware first, of the objections that may arise from potential buyers.  Also, keep in mind, that you may need to lower your expectations on market price to take into account the costs that potential buyers will face in order to address the issues and alter the property to better suit their needs.

Look forward to hearing your additional thoughts.

Be well,
Rhonda

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