For most people, buying a home is one of the most important things they will do in their lifetime. It goes without saying that buying a home is a process that should be done thoroughly and unrushed. After your client has attended quite a few open houses and narrowed down their list, they may have finally decided on a few houses to make an offer on.
However, before you help them place an offer, you will want to keep an eye out for some red flags that may detract some appeal. When a client really loves a home, they may be a little blind to the downsides of the home and will need advice when a financial venture goes sour.
Here are some signs that indicate that the house your client loves may not be the great deal they originally thought:
Offer Above Original Price Range
If you’re worth your salt as an agent, you’ll be asking your clients early in the beginning what their price range is—or at the very least, the most they are willing to spend. However, sometimes your client may be deeply in love with a property and place an offer at the end of their range. For example, say their original range limit was $600,000 and they fall in love with a home priced at $580,000. Maybe their original offer is turned down and after several rounds of negotiating put $620,000 on the table.
This not only puts them $20,000 over what was their original hard limit, but $40,000 past what the house is actually worth! Sometimes, a client will get tunnel vision during negotiations and lose sight of their original plan.
Appraisal Comes in Below Asking Price
In a busy market where many parties can be interested in one home, it is not uncommon for a bank’s loan appraisal to be below the asking price. While it isn’t unheard of, it doesn’t necessarily present the best situation for your client. In this case, the buyer will have to put up additional funds, which might not be possible. Or you can ask the seller if they would take a lower price. However, with multiple offers, the seller is likely to be willing to take less due to the line of people willing to put up the money.
You can try going to another bank and getting a new appraisal there or negotiate with the seller, but without proper funding, it is likely that you will just be wasting your client’s time.
They Aren’t Feeling 100% Confident
When your clients begin the search for their dream home, they’ll likely have a long list of requirements. While reality will probably knock a couple items off of their list, they shouldn’t have to settle for too much less than what they initially wanted. Let your clients know that they shouldn’t be placing an offer if they feel like they are compromising too much and aren’t 100 percent positive they want to move forward on the house.
Unless they are building their dream home by hand, they should reasonably expect some compromise. With a CRM for real estate, you can easily stay updated on your clients and their levels of satisfaction throughout the buying process.
You always want the best for your client, which means being able to provide the best advice for every situation. The more you learn about the ways deals can go wrong, the better you can help every buy find a home.
