During the past 5 years when we were marketing REOs for banks, we learned a few things from them that would be critical in helping the average home seller in today’s market.
For starters, when the banks anticipated high demand for a property based on recent sales in the same market, they intentionally priced it too low to create a shark frenzy. For instance we had an REO in a tough neighborhood of San Jose where all the neighbors were scared to be out late an night. Despite such demographics this bank priced the home at $265,000 which was sold in one week for $325,000 cash with more than 12 offers.
How does this apply to your home sale? Well you will need to have a very good idea of your home value. This should be the Fair Market Value of your home which means your Realtor would have enough time to market your home to all type of buyers. Your Realtor could develop a Competitive Market Analysis (CMA) to determine your homes value using the sold comps in the past 60-90 days.
Once you have listed your home, then you need to negotiate like The GodFather, meaning you should insist on seeing:
- Recent Proof of funds including Bank Statements
- Proof of seasoned deposits for down payment if purchasing with a loan
- Conditional Loan Approval from a direct lender
- The only condition on the loans final approval should be on appraisal
- Clean offer with no loan or inspection contingencies
- Counter the offer that if the bank’s appraisal is lower than the purchase price, the home owner will cover the difference and the escrow will close
- Penalty of $200 per day if the escrow does not close on time.
These are some tough conditions but if your buyers are serious about the purchase, they should easily be able to manage. The penalty clause is to prevent the Wholesale flippers from purchasing your property for the sole purpose of flipping it prior to close of escrow.
Well, now that you are well equipped to sell your home like the Godfather, why not call a Realtor to get it done.