Long Beach Homes and Condos - Negotiating Your Offer
15 comments »LONG BEACH HOMES - LONG BEACH CONDOS
Negotiating the Sale of Your Long Beach Homes and Condos
For BUYERS and SELLERS
Wow, what a real estate market in Long Beach these days, huh? Not many buyers out there, showings are scarce, prices are dropping, lenders are closing up shop, loan programs are disappearing - in the middle of escrows. How does a seller protect themself? Is it even possible?
It is possible to put yourself in the best possible position, once you receive an offer. Here are a few critical things you can do to protect yourself when buying or selling your Long Beach Homes and Condos:
- Demand a Lock-In Letter - valid through the close of escrow.
- Demand a Loan Commitment.
- Demand that the buyer Double App their loan.
- Pre Qualification Letters and Pre Approval Letters are not worth the paper they are written on, they do however provide the name and phone number of the lender. Your Long Beach REALTOR® can and should call the lender and ask if they will be able to provide the lock in letter and the loan committment, and in what time frame.
- Place these terms in your counter-offer as terms to be met "PRIOR TO ACCEPTANCE OF OFFER".
Sound Harsh? Not really. Lets take a look at it.
- Demanding a Lock in letter assures the BUYER that there will be no surprises at the Loan Docs signing, the interest rate promised to them will be the same they sign for at the end of the escrow. This protects the SELLER as well. No surprises, no fallout.
- Demanding a Loan Commitment assures the BUYER the loan they were promised will be the loan they will receive; the terms will be as promised. This protects the SELLER as well. No surprises, no fallout.
- Demanding that the buyer Double App the loan assures the BUYER that if the lender closes their doors, or the loan program disappears, they will have another loan available to them - without a mad scramble and without having to start from scratch. Starting from scratch could set the escrow back 3-4 weeks. (Both lenders should be made aware that the loan is double app-ed. The polite way to phrase this on your counter offer is "Lender #2 will close the loan in the event that Lender #1 fails to perform.") This protects the SELLER as well. No surpises, no fallout.
BUYERS BEWARE: If your lender hesitates in providing a Lock In Letter and a Loan Commitment, this usually means they have not secured the loan as promised, and are likely still shopping the loan with the hope of finding one close to what was promised you. There is no guarantee the lender will be successful in this endeavor. A reputable lender should be able to provide you with both within 2 to 3 days of your request at no additional cost.
What does this accomplish for the SELLER of a Long Beach Home? It flushes out a lender who is still shopping a loan they may or may not locate while your home is removed from the market, effectively harming you.
This process protects all parties in the escrow.
For assistance in the sale of Your Long Beach Home or Condo, call Laurie today.
| Laurie MannyLong Beach Realtor (562) 212-5420 |
|
Main Street Realtors Belmont Heights 244 Redondo Avenue Long Beach California 90803 |
|
|
|
|
|
|
|
· http://www.manatulberg.comLaurie, This is the best advice for both buyers and sellers in this market right now.
Permalink September 15, 2007 11:30:52 · http://www.longbeachrealestatehome.comI think so. Without a lock in letter and a loan commitment it is like saying "Hey take your home off of the market while I try to get a loan".
Permalink September 15, 2007 11:55:29 · http://www.Miamism.comLaurie - here in Miami the lock in letter and loan commitments are almost impossible to request at time of offer but with all these contracts falling apart I know the change is soon to come.
We have been discussing this with a few in the mortgage industry and although they hate to hear it, they totally understand. It's our duty to protect our sellers and we HAVE to get tough.
Permalink September 15, 2007 12:10:57 · http://www.longbeachrealestatehome.comAny reason why you cant demand them in a counter as "Final acceptance is contingent upon receipt of lock in letter and loan commitment within X amount of days of acceptance, property to remain active on market until all contingencies are satisfied"? This takes is out of the lenders hands and makes it part of the contract. A 24 hour notice to perform or quit if the contingency is not met would free the seller. Or are the contracts that different in Florida?
Permalink September 15, 2007 12:36:19 · http://LiveLakeForest.comLaurie -
This is wise advice! I'm going through a sale right now where the buyer is on his 3rd lender, and escrow has been delayed 15 days, so far. The buyers have removed all contingencies, as well as released 1/2 of their deposit to escrow, so we know they are serious about this sale. It will probably close a month late, but in this market, we don't want to have to go find a new buyer!
Requesting that they double app at the start might have kept this one on schedule!
Permalink September 15, 2007 16:50:46 · http://www.longbeachrealestatehome.comI am hearing this story way too often these days which is what provoked this post. Do the buyers now have a lock in and a commitment? I sure hope so.
I just wrote a counter and demanded that they double app through Brian Brady who is a direct lender and loan originator stating that Brian would not close on the loan unless their lender failed. I further stated that the loan had to meet with the buyers approval. Don't want it to sound like I am forcing them to use my lender. If they were not happy with the terms of the back up loan we would make other arrangements.
You know they would have been living in their beautiful new home already if they used super-lender Brian Brady (shameless plug).
Permalink September 15, 2007 17:38:30 · http://www.jfivehomes.comLaura - Sound advice; and it make sense to make to have these condition met prior to acceptance.
Permalink September 15, 2007 21:10:31 · http://www.southbeachrealestateblog.comLaurie
You are on it. Most of the agents here in Miami are clueless with regard to anything but full-price, all-cash offers.
It's a new game now.
Permalink September 16, 2007 00:09:58 · http://www.longbeachrealestatehome.comThanks, it does make sense. It protects all parties in the transaction. Prior to acceptance is necessary, to close an escrow that is opened requires the signatures of both parties. If one party refuses to sign you are in a fine pickle.
Permalink September 16, 2007 00:34:55 · http://www.longbeachrealestatehome.comYour market and mine are VERY different. Full price, all cash offers are not the norm here, they happen, but are rare. If your market is turning to one requiring financing take heed my friend, this is sound advice.
Permalink September 16, 2007 00:36:28 · http://beachcityrealestateinfo.blogspot.comWhen you are right.. You are right.. and this advice is what Buyers and Sellers need to know.. The market has changed and we need to go back to some of the things we used to do to protect all parties in a transaction..
Permalink September 17, 2007 02:04:48 · http://www.longbeachrealestatehome.comExactly, the beauty of this is that it protects EVERYBODY in the deal.
Permalink September 17, 2007 02:20:23 · http://HammersTeam.comThose are fighting words alright. Would want you on my side as a Seller in this market. Things are starting to get this bad on our side of the country too but have not yet reached this proportion. It's certain to get here though - it's only a matter of time. Great bit of info!
Permalink November 11, 2007 09:23:48 · http://HammersTeam.comThis is great information for your Sellers to know. You provide the best service hands down!
Permalink November 11, 2007 09:26:40 · http://www.longbeachrealestatehome.comPermalink November 11, 2007 15:07:42This post has no comments awaiting moderation.
Copyright © 2008 - Long Beach Homes and Condos For Sale