Today market requires offer which yesterday would not even be thought of. We are seeing larger deposits and stronger financing terms. Coming back is 20% down or more to convince the seller they are strong and will complete the sale.
If you have been practicing real estate for a while...likely you have seen the evolution of the Clean Offer. In the "olden days"....which in any market anywhere pre-dates Thinventory....times vary with the market. In the olden days....a "Clean Offer"was...an offer with inspection and in southeastern Wisconsin, a radon test... and financing contingencies which included an appraisal. That was "clean" and "normal" ,,,,,it is what Buyers wrote...it is what Sellers accepted...it is what agents on both sides accepted as "usual and customary."
In the interest of being competitive...less and less becomes "usual". The radon tests are sometimes one of the first things to be deleted.Buyers may choose to test for radon...but will not ask the Sellers to have it mitigated in a muliple offer situation for fear of having their offer eliminated due to asking the Sellers to bear the cost of mitigation.
Experienced agents know that the two largest reasons an offer can fall apart are inspections and financing. If a house appears to be "in good shape" OR has had a pre-inspection...Buyers may forego the inspection..OR choose to use it as an "advisory" and not to either have the Buyer ask the Seller for repairs...or as a reason to cancel the sale.
Financing....hmmm...regardless of the price range in Southeastern Wisconsin, unless the sale is investor oriented, we do not often see cash sales. Agents/Buyers don't worry about
cash sale competition when submitting an offer. Other "strengths" in writing can mean a larger earnest money deposit. We don't have "rules or percentages" that are usual and customary here...Buyers are free to deposit whatever number they please as a show of good faith to the Sellers. Now...what may have been a four figure deposit is becoming five figures.
There are Buyers and Agents that look at an appraisal contingency as the "saving grace" in an offer...If the property does not appraise for the price offered...the Buyers can choose to walk away...or finance the balance of the home that was over the appraised amount....or negotiate with the Sellers...who cannot be sure that another appraiser will not give them the same number "different day." If the Buyer is able to...wishes to take the risk...is going to live in the property long term...an offer can be written...NOT subject to appraisal.
Agents need to be aware of the "New Clean Offer" options....AND more importantly be able to explain with each "new improved" option what the realities are for the Buyers.
Thinventory has created a NEW DAY in real estate...are you Ready ?
This has been an informational market post brought to you by Sally K. & David L. Hanson, Broker Associates with EXP Realty, LLC bringing you the best in real estate marketing in southeastern Wisconsin. #FewerContingenciesinrealestateoffers,#NoAppraisalinRealEstate,