No, a home seller is not obligated to accept any buyer’s offer, no matter the price or the terms. Until both parties sign a contract, it is just an offer. Just because a seller lists the home for sale in the MLS and has open houses they are not under any obligation to accept a full price offer. However, many real estate listing agreements specify that if the listing agent brings the seller a full price offer, the agent is due the commission. Sometimes brokerages enforce this, many times they do not. If you are not ready to sell, it’s better not to list your home for sale publicly.
A foreclosure listing in real estate is no different than any other sale except that the owner of the home, the seller, is a bank, not a person. Banks tend to price their listings on the high side of the real estate value range expecting some negotiation. Look at the recent comparable sales nearby and use them as a gauge. Foreclosure sales tend to sell for less than regularly marketed homes for sale. Many times there are disclosure issues, the previous owner may have damaged it, or it simply in poor condition due to the fact that it’s been vacant.
No, you don’t have to offer full price on a short sale. Normally an offer is made and the seller can accept it, reject it or counter it, just like any other real estate offer. With a short sale, the seller has to send your accepted offer to their lender for approval, before moving forward to close. The bank then has the option to accept that price, reject it or counter it. Once the bank agrees on the terms, the closing can happen. From time to time a bank will agree on a price in advance. You might see something advertised like; bank approved short sale at $575K. In this case, you shouldn’t offer less than that or it is a waste of time.
DOM stands for “days on market”. Realtors have known this phrase forever. It’s something we track to know when a property was first listed. The longer something is on the market, the harder it is going to be to sell at its current price or condition. Given all of the information online today, buyers will see DOM, and it will help inform their decision about making an offer on a home. Note that sometimes a home will have been listed previously, but never sold. The DOM won’t take into effect that prior listing. It is important to research past sales of a home you desire.
For sellers, the best time to sell a home is when inventory levels are low, in the dead of winter and between Thanksgiving and Christmas. High inventory means competition from other sellers. With the “always on”, mentality today, particularly in urban areas, buyers are always looking at listings and always in the market. I’ve seen buyers make offers on homes on Christmas Eve. If you are the only game in town, you will likely get their attention. It is important to know that if your market is affected by school schedules and it would be wise to hold off, if so. In more suburban or rural areas, the buyers simply stop shopping once their kids are in school and wait until the next spring. Know your market before listing. What works for one market, may not work for another. One thing I always say about listings is that if a home is priced right and shows well, no matter the time of year of or the market, it will sell.
You really can’t time a real estate purchase. You have to buy when it makes sense for you financially, emotionally as well as for practical purposes. Having said that, year in and year out, there are more homes for sale in the spring and the fall, which translates into more options for buyers. Increased inventory means the best time to buy a home. Inventory levels are very low in the dead of winter and summer. Purchasing a home is a personal decision. If July 1st comes, and you are aggressively looking and “in” the market, should you take whatever house is available? Probably not. In that case, it might be better to hold off until after Labor Day to see what else comes out. Never buy under stress or feel desperate to make a purchase. There will always be another house for sale.
No. You should buy a home because you are ready to put down roots, have saved for a down payment and want to build equity. Will rising rates affect affordability, yes? Interest rates will rise and will make it more expensive to finance a home, but that shouldn’t pressure you to buy. It’s too big a decision. Plus, it takes a very long time for rates to rise to make a meaningful difference. If rates rise even one percentage point in a year, it won’t put a buyer out of the market. In the 1980’s rates were as high as 15%. In the early 2000’s they were below 3%. Nothing happens over night. Buy when you are ready to buy.
Real estate agents are independent contractors, paid per transaction only, not a salary. They are self-employed small business people, working on commission only. Agents only receive a commission when a sale closes. Sometimes real estate agents work can with buyers for months or years and never get paid a dime if the buyer does not purchase a home. The same holds true for listing agents. In slow markets, an agent can hold dozens of open houses, spend money on marketing and show a home hundreds of times. If the home does not sell, they do not get paid. Typically the seller pays the real estate commission, which is split four ways; two agents and two brokerages. Each of the brokerage firms will receive half, and then the brokerage firm and the agent split their share based on that agent’s production.
There is no way to be sure if there is another offer on the table. No law requires the listing agent to disclose the presence or details of any other offers. For the most part, you have to take the listing agent’s word for it. So often, ‘other offers’ come out of left field that it leaves buyers feeling suspicious. If you like the home, and it is within your budget, you just have to give it your best shot. The other option is just to wait it out and see what happens. The market always has a way of figuring itself out. A serious and committed buyer will stop at a certain point. Could you get it for less? Maybe? If you love the home, it’s often a very stressful and uncomfortable situation because you don’t want to lose it, but you also don’t want to overpay. Ask your agent about the reputation of the listing agent? Many times, a real estate agent’s reputation will tell a lot. If you don’t feel that the listing agent is ethical and honest and that agent is the representative of the seller, it may make you think twice about buying the home. Also, realize that it is in seller’s best interest for the listing agent to let any other buyers know that there is another interested party or that an offer may be forthcoming. It can lead to a second offer.
It is nearly impossible to find out about the competing or other buyers offer on a listing. The listing agent and the seller are the only people who see all of the offers, and they don’t have any obligation to disclose. Sometimes buyers or buyer’s agents can ask the listing agent what the other buyers offered or try to feel them out and get some idea. If you are working with an agent who is well connected, and well liked, chances are they will get some feedback from the listing agent. But, for the most part, a buyer has to go in cold, without any specific knowledge of what the other buyers offered. If you are in a multiple offer situation, leverage your agent, look at the comps and give it your best shot. You don’t want to have buyer’s remorse if you go too high and you will be kicking yourself if you go to low. Ultimately, it’s part of the home buying process and you learn from each offer.