Recently we received a few potential listing calls from would be Atlanta home sellers that wanted to list their homes. It was interesting, but after speaking to them on the phone they all had a similar story. We really were not in any position where we could help them! They were totally upside down! I am sure we just confirmed what a few other professional agents had told them. I guess they were just waiting for someone that told them what they wanted to hear! We do not do that.
The problem is that as Atlanta home buyers, they incorrectly purchased homes with either an on-site agent or with a discount real estate company that rebated back a portion of the commission back to them. One scenario for the new home buyer was that they were totally unrepresented because the new homes sales person does not represent them, And obviously the concessions they recieved purchasing at the time seemedlike a really smart idea! Too bad it wanb't! The other was the rebate buyer agent company that kicks back a home buyer's rebate to the home buyer. That was an interesting story...buyer companies that said they were representing the home buyers, but did nothing to for them. The home buyers would have done better off wihtout any agent in this case! How bogus! In fact they had even signed buyers agency, but their rebates were coupled with an agreement that was really a "hold harmless form!" The buyers agents did not arrange inspections, write counters, and did not even show up at the closings. That does not sound like the services of a buyers agent! Very foolish, but did the home buyers know how dearly the $1500 buyers credit was going to cost them? I think now they are starting to get an idea of the real cost!
One of the calls we recieved, we noticed the builder sold a home that was on the market for over 1 year, and offered the buyer a few concessions. (The home buyer did not know that until we researched it, and told them!) The problem? The home buyers still overpaid by over 25K, plus added concessions! That translates into, "SORRY WE CANNOT HELP YOU!" Unless the you as an Atlanta seller can bring about 40K to closing to cover commissions, incentives, buyer closing costs, and cover the lower sales price you're out of luck! Just think about it! The result of getting back a $1500 rebate on the front side, and not asking the right questions before buying is a declining market! A truly fatal mistake! The sellers are so upside down they will not be able to sell without their cash in the deal!
Upon research of the items that various sellers wanted sold, it was obvious that as home buyers both purchased homes and residences without knowing the true value of what they were buying. They did not ask how long was the property already on the market, and what the price of neighboring properties were selling for. When a builder says:
- I will pay all closing costs if you use my lender.
- I will pay a years worth of condo fees
- I will offer you upgrades worth 15K
- Free Granite Counters and Stainless Appliances
- Free Fun Money for Free Furniture
- 3-2-1 Buy-downs
- 10K worth of Whatever You Want it For...'Free Finished Basement
- A Free Pool for Contracts written by....
- A sign that says Future Community Pool, and Facilities site
- What qualifies the property as the right location?
RUN FOR YOUR LIFE! ASK ABOUT:
- Instead you should be asking why would the builder or on-site agent offer all of this?
- You need a home buyers CMA What are neighborhood sales prices
- How long have they been on the market?
- How many times has the unit been on the market?
- Have prices dropped or increased.
- Has new construction stopped?
- What bonuses or increased commissions are offered to the agents that sell the home?
- How many homes or units are in the total build out?
- How many are sold?
- How many Closed sales?
- How many are rental units!
- Is rental of the purchased unit an option?
- What are the reserves? Percentage of units in arrears? Are they Negative?
- Special assessments planned?
- Proximity to power lines, roads commercial real estate, creeks, airports, flood zones etc?
- What about all the unfinished homes and 4 foot tall weeds?
- How many units or homes are rentals?
PS...You should be allowed to use your own lender and ask the builder to contribute to your closing costs. There is also no reason why you should not be able to negotiate the price!
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