News on Youtube Nov 27 2018

Well hi there, I'm Michael Hausam of the Hausam Group at Vista Pacific Realty.

So the big question every homebuyer has is, "What do we offer on this house?"

And I'm going to give you some tips and pointers and things to think about. The

first two issues have to do with knowledge and leverage - two key important

points when thinking about putting together an offer. Knowledge is just

the information that you have at hand and leverage is the amount of power that

you can exert in the negotiations. So firstly you always want to attain as

much knowledge as you possibly can; most importantly, you want to get knowledge

about the seller and then secondarily about the house itself. Listing agents

are, well, they're not always their clients best friends. Listing agents, in

an effort to be friendly, an effort to try to move a property, may oftentimes

tell you things that they have no business talking about. If you can find

out that the seller has already bought another house or if they've got some

other thing going on in their life, that kind of information can be incredibly

helpful. Thinking about a house that I know of in the South County right now that's

been on the market for a little while... (knowledge piece number one) Number two, I

know that they've bought another house. (knowledge point number two) Number three

is that they recently took a loan out on the house that they're trying to sell to

buy the next house. Now imagine you as a buyer, having that information - that's

incredibly helpful. On the other hand, you want to make sure you limit the amount

of knowledge that the other side has. The worst thing you could possibly do is let

a listing agent know, or let a seller know, that you've been actively looking

at houses for a year, you've lost a couple of houses, and their particular

house might just be the dream house. Don't give, don't give them that kind of

knowledge. Now on the other hand is leverage - sometimes you can use the

knowledge that you've gained as a leverage in the negotiations and if you

have that as an opportunity, that's fantastic. But other times you

won't have any knowledge whatsoever, other than the house and some comparable

sales. So what do you do then? Now, tip number one, when thinking about your

offe,r is to evaluate yourself. You have to put yourself in the seller's shoes and

critically evaluate you as a buyer. You know for a seller the ideal buyer is an

all-cash, no contingency, ten day close. That's the perfect buyer. It's easy to

imagine the listing agent, advising the seller, "This is the buyer you want. Take

this offer." Now if you're not that buyer, you need to take a look at all the

various moving parts of your offer and make them as strong as possible.

What's your deposit going to be? If you need financing ,how far along in the

process are you? Did you just had a casual conversation with the lender or have you

obtained full on conditional loan approval?

How long of an inspection contingency period? Do you really need the

full 17 days to look at the house? Or can you get your ducks in a row and get in

and out of there in five, six, seven, or eight days? Lastly, how long do you need to

close escrow? Can you close escrow in 20 days, 25 days? Or for some reason do you need

45 or 60 days? Is your offer contingent upon selling another property? All of

those things you need to critically evaluate yourself, to honestly assess

whether you're as strong of a buyer as you as a seller would like. And anything

that isn't strong, change it. Number two - evaluate the property. Definitely do some

due diligence before writing an offer. You need to have a really good idea

on what's been happening in the past in the marketplace, by looking at the closed

sales. You also need to know where the market is right now for that property

and that's by looking at active and pending sales. Sales that are in escrow,

but haven't yet closed, give you a very good idea of where the market is today.

And then lastly, of course, look at the competition. Are there other houses that

are similar to this one on the marketplace or is it totally unique? All

of those things will help bring you to a point to figure out what you want to

write for an offer. And then number three - write the offer.

I always advise my clients write your offer at whatever number you want. My job

as your representative isn't to tell you the price that you want to pay for the

house, my job as your representative is to get the seller to accept the price

that you've offered. Now, of course, you need to take items number one - you

yourself as a buyer - and number two - the marketplace for the property - into

account, but the bottom line is this: it's your offer and you're telling the seller

how much you want to pay for the house. Another thing really important about

this: don't have any conversations with the seller or the sellers representative

ahead of time. Don't have your agent call and throw out some sort of trial balloon:

"Well, would you be willing to negotiate? Will you take this or take that?" The

only place to have a discussion about price, or to have a negotiation about

price, is when there's an offer on the table and a commitment at hand. It

reminds me, my son recently was trying to sell his motorcycle, right? So he put the

price in, uh, oh he did it on Craigslist and a couple of other motorcycle sites. And

he started getting incoming phone calls right away; and he was asking me how he

should respond to those phone calls. "You know dad, they're asking me if I'll take

a lower price or they're asking me if I'm willing to negotiate..." and I just said,

"Well of course they are; but don't give them any of that." The

phone is to be used to set an appointment and an appointment is when

you actually have the conversation about price. So when you do write that offer, at

the price that you want to write, the seller has three options: he's either

going to accept your offer or he's going to counter your offer or he's going to

ignore it. Now this is a really important thing to

think about: You never ever have any idea what's really going on behind the scenes,

right? And it will take your offer to maybe

uncover what's happening. You may write an offer that I might sit there and

think that it's a crazy number, that it's way below the comps, that if it were me I

wouldn't write that offer; but again I'm not writing the offer, you are. I'm just a

representative. But the seller, he may have something completely different in

mind. He may have already decided, "You know what, the next offer we get ,because

the last one fell apart, we're taking it." You just don't know. So when you write

that offer, it shouldn't be accompanied with any discussion about comps or the

neighborhood or any kind of intended negotiation. Write the offer, slide it

across the table, or however it's delivered, and then let them respond. Now

if they counter, it's at that point you have a conversation about comps to

justify the number that you came up with or to justify yourself as a really good

buyer, the kind of buyer that they want; but don't discuss any terms or anything

like that until you get a counter. Now if you don't get a counter, if they come

back and they just say, "You know what? we're not gonna dignify this with a

response" or something like that, that just means you need to try again. Write

another offer. So I hope this helps you figure out what your offer price should

be. Briefly, it should be whatever it is that you want to pay for the house but

make sure that you're prepared to demonstrate that you're the kind of

buyer that they would love to have in the first place. Now there are other

strategies that can be employed and I'd love to talk to you about those as well,

please get a hold of me by calling me at nine four nine four one three two three

seven one. You can email me Michael at Hausam Group.com. Or right here above

my head should be a little button, a little "i" with a circle around it; you

click that thing and that will take you to my website.

I'd be happy to sit down with you, show you the system that I use, and the

strategies that I employ for my buyers - and help you buy the house of your

dreams, at the right price. Thank you so much and

have a great day!

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