We finished an open house in Manhasset Hills last Sunday and it was not much of a surprise to me or my agent Helene that 35 purchasers plus seven agents showed up waiting online in the cold. We sympathized with everyone as we didn’t want more than two couples to enter at a time. Even though the Omicron infection rate has gone down tremendously, we still practice healthy social distancing and required CDC regulations. Everyone filled out the required forms, but one must be smart and prudent to keep people safe and healthy as we don’t want to be a negative statistic. So we still have to be extremely careful when doing our open houses or meeting with clients.
After receiving a multitude of cash and financing-based offers, and more are coming in, we must be very careful to ascertain which ones are truly the best and real and eventually narrow down the one that will be the highest and most importantly close. A bit of a bidding war occurred, but as of this writing nothing had been finalized.
It’s not only about the price, but the terms and conditions that will also be critical and at the same time offer the most advantages situation for the sellers. But in the long run, the sellers have to make their determination after much guidance as to which offer they will accept. It is crucial to deal with everyone fairly and provide all buyers with clear communication and disclosure as to where their offers stand.
Obviously, as they say, “cash is king” in this market, assuming it is high enough to be acceptable to the sellers. However, there will be times when the terms and conditions provided will be a defining factor in the offer because another offer will not make it contingent or subject to an inspection. The buyer also might not make it subject to the appraisal (even if the appraisal comes up short on the value/sale price) which essentially is similar to a cash deal. They might lose their deposit if they don’t come up with the additional amount needed to close. This is rare, but does occur, unless the contract clearly stipulates this in very succinct language.
Some banks are getting a bit more conservative, based on the acceleration of prices over the last several years and are requiring more money down to be in a safer position as interest rates have increased over 1 1/2 percent over the last few months from the low point. However, rates are still at historic lows.
From what I have experienced over the last year or two, there are buyers who have a very strong need and mindset to purchase and who are very capable financially. They are prepared to “pull the trigger” when they find the right home. Many will be residing in the home for 10 to 20 years and do not hesitate to make offers, as I experienced at our open house.
Presenting all offers to the seller with all the terms and conditions is tantamount for sellers to see and understand the “big picture.” As a broker I only favor those offers with terms and conditions that make the most sense to the sellers and that they will agree to. Moreover, no personal letters of any kind from buyers are allowed in order to sway sellers to take their offer, as this can cause legal ramifications as favoritism. There are times when a cash offer doesn’t necessarily close the deal because the time to close is too quick or too long; the downpayment is too small; buyers want certain things done or other variables that don’t work for the sellers; or an offer subject to financing provides the best scenario for the sellers.
When receiving multiple offers, it is important that they are all presented in an efficient and straightforward manner and the broker provides the best guidance for sellers and purchasers to come to a happy conclusion.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] Just email or snail mail (regular mail) him with your ideas or suggestions on future columns with your name, email and cell number and he will call or email you back.
