Seller Concessions

One of the new realities of the current real estate market is that buyers often ask for concessions, monetary and otherwise, from sellers.  It used to be that they asked for things to be included or fixed, based on the inspection.  Now, they also may ask for the seller to pay some or all of the closing costs.  This is often so that the purchase price is higher, and allows them to qualify for a higher mortgage amount.

We have seen some issues at the closing with these requests.  The sellers don't always seem to realize that the purchase price will be the basis for the conveyance tax, the land records, and the commission.  It's the amount at the top of the sales contract that governs all those amounts.  We, for instance,  have other brokers to pay in almost all cases.  Sometimes it's a referral, sometimes a co-broke, either inside or outside the company.  The commission offered is on the full amount, and we are responsible for it, whether or not the seller made concessions.  While I understand why sellers wouldn't always like that, I don't see the difference between a concession made in cash or at closing from a concession made during inspections or even during negotiations.  It happens, and it isn't our fault.  And we shouldn't have to take the co-broke commission difference out of our pocket.

There are a lot of ways to get upset during the length of a sales transaction.  But, please, don't shoot the messenger.  We're trying to help.

Listing Prices and Offers

This morning at our New Haven office sales meeting, agents were saying that people still want to price their properties too high for the current market. We went on to recount numerous stories both good and bad; people who priced too high and ended up with very low offers, and people who went lower and got multiple bids over the asking price. We believe that buyers know the market conditions, and that they will correctly gauge where offers should be. When it looks like a bargain, they know to bid high. When it looks too high, however, most people deduct too much, figuring that they are in for a long round of negotiations. And, of course, that's exactly what that seller was thinking when he listed too high--a self-fulfilling prophecy all around. Agents told stories of people who ended up selling for too little by using this latter method.

We agreed that sellers don't realize that most buyers search by price. That is, they go onto the internet, our website, or Realtor.com, and they enter the sales price they want to pay. Therefore, if you list your property at $400,000, hoping to get around $350,000, a person who can pay $350,000 may never see your home, because they would be searching in a range that would not include your asking price. So, even though you might be willing to bargain, you may never get that chance, because the above buyer will be out looking at houses listed in his price range. Once you realize the way the process usually works, you will understand why Realtors push so hard to get you into the range that will give your property the maximum exposure, and therefore the greatest chance of selling.