Is a low offer a good idea?

While your low offer in a seller's market might be immediately rejected, in a buyer's market a motivated seller will either accept or, more than likely, make a counteroffer. As your Denver Real Estate Insider I'll work with you directly to make an offer that makes sense for your situation.  I'll also work hard to make sure your offer is presented in a professional manner and negotiated to uphold your best interests.

Full-price offers and above asking price offers are more likely to be accepted by the seller. But there are other considerations involved:

• Is the offer contingent upon anything, such as the sale of the buyer's current house? If so, even at full price, the offer may not be as attractive as an offer without that condition.
• Is the offer made on the house as is, or does the buyer want the seller to make some repairs or to lower the price instead?
• Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.

What contingencies should be put in an offer?

Most offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction.

As a buyer, one could forfeit his or her earnest money deposit if one were to back out of the deal for a reason not stipulated in the contract.

The purchase contract must include the seller’s responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.

How is the price set?

It is of upmost importance to price your home according to current market conditions. Because the realty market is constantly changing, and market fluctuations have an effect on property values, it's imperative to select your list price based on the most recent comparable sales in your neighborhood.

A comparative market analysis (CMA) provides the background data upon which to base your list-price decision. Contact me for a CMA of your home today.

Is there a secret to good negotiating?

There are a few key rules to negotiating effectively. One is do your homework, and learn as much about the seller or the buyer as you can. Another is to play your cards close to your vest and not reveal too much information to the other party or their agent. Don't let yourself get rushed into any decision, no matter how tempting it may be. Finally, hire a professional to manage your transaction and negotiate on your behalf. 

Always remember, that the listing price is what the seller would like to receive but is not necessarily what they will settle for. Before making an offer, check the recent sales prices of comparable homes in the neighborhood to see how the seller's asking price stacks up.

Are low-ball offers advisable?

A low-ball offer is how we describe offer on a home that is significantly less than the asking price.

While all offers will be presented, a low-ball offer can sour a prospective sale and discourage the seller from negotiating at all. Unless the house is significantly overpriced, the offer will be either countered or flat-out rejected.

It's imperative to do your homework about comparable pricing in the community before making an offer. It also pays to learn about the seller's motivation. A lower price with a quick closing, for example, may motivate a seller who has to move or has another home under contract.

Are interest rates negotiable?

Some lenders have the ability to negotiate on the loan rate but this isn't typical among established lenders who set their rates like large corporations set the prices on their goods. Nonetheless, it pays to shop around for loan rates and know the market before you go in to talk to a lender. I have a network of lenders willing to discuss your options. As a rule of thumb, one should always look at the combination of interest rate and points and get the best deal possible.

The interest rate is much more open to negotiation on purchases that involve seller financing. These usually are based on market rates but some flexibility exists when negotiating such a deal.

When shopping for rates, check my rate tracker on my home page. 

Can you buy homes below market?

While a typical buyer may look at three to seven homes before submitting an offer, a real estate investor who focuses in on bargain buys usually goes through many more. Most experts agree it takes a lot of determination to find a real "deal." There are a number of ways to buy a property below market value:

• Buy a fixer-upper, improve it and keep it or resell at a higher price.
• Buy in a transitional neighborhood, hang on to the home for a while and then resell it at a higher price
• Buy a foreclosure property (after doing your research carefully).
• Buy a partial interest in a piece of real estate, such as part of a tenants-in-common partnership.
• Buy extremely early or at the very end of a new-home development - often times builders will offer incentives early in the development to gain momentum and at the end of the development to ensure a seamless closeout.

Can you negotiate the price on new homes?

It can be difficult to negotiate the sales price with a developer because they may claim their prices are based on fixed construction costs. But it doesn't hurt to try.

As previously mentioned, builders more likely to be flexible on pricing at the very beginning and the very end of a project. Early on, most developers want to move people in quickly so the project picks up momentum. Later, developers may be more inclined to accept lower offers when only a few units remain.

If negotiating the base price doesn't work, I would recommend negotiating for better amenities (upgrade carpet, light fixtures, etc.). My experience shows that a developer will rarely pass up a deal over a couple thousand dollars' worth of upgrades.

Who gets the furnishings when a home is sold?

It depends. Fixtures, any kind of personal property that is permanently attached to a house like drapery rods or built-in bookcases automatically stay with the home unless specified otherwise in the sales agreement. But anything that is not nailed down is negotiable. This most often involves appliances that are not built in (washer, dryer, refrigerator, for example), although some sellers will be interested in negotiating for other items, such as a piano or a piece of furniture that was built specifically for the home.

What do you think of get-rich-quick real estate schemes?

In my opinion there is no such thing as getting rich quick in real estate. But honestly there's no end to get-rich-quick programs offered to the public as alternative methods of buying homes.

Some are reputable while most depend on your financial circumstances to work. A handful are simply scams.

Many get-rich-on-real-estate programs offer advice on how to buy government foreclosure properties and participate in other government programs. Most of this information can be obtained by calling the government offices involved directly.

Anyone interested in real estate investments would be wise to explore a variety of sources. Most investors view real estate as a long-term investment. Deals that sound too good to be true often are.

What is the best time to buy?

Because many buyers prefer to move in the spring or summer, the market starts to heat up as early as February. Families with children are eager to buy so they can move during summer vacation, before the new school year begins.

The market slows down in late summer before picking up again briefly in the fall. November and December have traditionally been slow months, although some astute buyers look for bargains during this period.

Do I need an attorney when I buy a house?

In Colorado, you do not need an attorney to complete a real estate transaction.

As your Denver Real Estate Insider I am more than capable of handling routine real estate purchase contracts. However, I am not an attorney and refrain from interpreting law and would recommend you contact an attorney if you have any legal questions. I have compiled a list of trusted real estate attorneys - click here to request the list.

What repairs should the seller make?

If you want to get top dollar for your property, you probably need to make all minor repairs and selected major repairs before going on the market. Nearly all purchase contracts include an inspection clause which is a buyer contingency that allows a buyer to back out if numerous defects are found or to negotiate their repair.

The trick is not to overspend on pre-sale repairs, especially if there are few houses on the market but many buyers willing to buy at almost any price. On the other hand, making such repairs may be the only way to sell your house in a down market.

What is the difference between list price, sales price and appraised value?

The list price is a seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area.

The sales price is the amount of money you as a buyer would pay for a property.

The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.

What is the first step to buying a home?

Finding out what you can afford is one of the first steps, which can be done by pre-qualifying for a home loan. This step will help you narrow your search for both a neighborhood and particular houses. A pre-qualification is a simple calculation that considers several factors, but primarily your income. There are no guarantees with a prequalification, but it will be expected of you when you make an offer on a home.

Should I include an inspection contingency in my offer?

An "inspection contingency" protects you as a buyer in a purchase offer by allowing you to cancel closing on the deal if an inspector finds problems with the property.

As soon as the seller accepts a written offer, the document becomes a legally binding contract. The purchase contract can be written to include a contingency for any repairs found to be needed or related items the seller must take care of before closing. If these are not dealt with, and you have such a clause in your contract, you can delay or possibly cancel the closing. If it's not stated in the contract, you could face losing your deposit. There also may be costly legal implications stemming from backing out of a contract.

You usually will have the right to choose the inspector (and be responsible for paying for the inspections). In addition to an overall inspection for structural soundness, you can request a satisfactory roof inspection report or contingency for no potential environmental hazards such as asbestos or radon gas.

Contingency clauses should satisfy the concerns of both the buyer and seller. Buyers also can protect themselves by inserting additional necessary contingencies. Indicate which items like curtains and appliances are to remain with the house. Then stipulate you have the right to personally inspect the home 24 hours before closing to make sure all is in order.