Commonly Asked Questions & Issues

Vivian Long, Broker-Associate, ABR, CRS, E-PRO, GRI, LTG, PMN, SRES

REMAX/OPTIMA    333 E Glenoaks Suite #100 Glendale, CA 91207

(818) 571-0435

Q: How do I know if the house is overpriced or priced right?

A: A "Comparative Market Analysis" should be done to see what has been sold in that neighborhood that compares in amenities and size to that particular property.

Q: When I make an offer, how much flexibility is there in the price?

A:  It depends on the market.  In a seller's market, you're in a bidding war.  If in a normal market, and the property is not overpriced, usually two to seven per cent, depending on the price range of the home.  For homes between $200,000 and $300,000, approximately 2-4%; $300,000 - $500,000, 2-5%; and greater than $500,000, 2-7% (usually, the higher the price, the more flexibility).  

Q: How do I know that two to seven percent flexibility in price is correct?

A: We look at the statistics that emanate from the Board of Realtors for the district.

Q: Are there times when there is no flexibility in the price?

A: Yes.  Some sellers will simply not negotiate.  Foreclosure sellers are the most common example as these properties are generally priced with great discounts by the banks.  Consequently, they often have multiple offers on them and sell not only at asking price, but in many cases, for greater than asking price.   Offers made on these properties need to be aggressive, ("slam-dunked"!) or you will lose them to a competing buyer.

Q: What is a 'frivolous' offer?

A: An offer that is so low that you know it is impossible for the seller to take.  Most first-time buyers don't realize that the seller also has "closing costs" to pay... about 7.5-8%, as well as their loan payoff.  These offers often are not even responded to by the seller (i.e., they are not even "countered").

Q: I know that I will get a tax write-off  at the end of the year because I can deduct the interest on my loan, and property taxes -- but my payment every month is going to be a lot higher than my present rent.  How will I be able to make the payment without feeling like I'm stretching to do it?

A: Most buyers go to their payroll department at their place of employment and ask to increase the number of exemptions for tax purposes so as to get more money back each month, rather than waiting to get it back at the end of the year after filing taxes.

This last question here is not one commonly asked, but is very important to be aware of regarding “buyer’s and seller’s remorse.

Q: What is 'buyer's remorse' and 'seller's remorse'?

A: These are the phenomenon which occur after a buyer makes an offer and it is accepted by the seller:
i. The buyer suddenly becomes scared and nervous, agonizing about all the things he might have forgotten to ask, and questions whether he made the right decision, can afford the payments, etc.   
ii. The seller on the other hand, starts thinking that he sold the property for too low a price and wishes he had negotiated a higher price.

I hope this lays some groundwork for you when you start the "adventure" of finding your special home -- it will require some heavy leg work at first as you look at the inventory to give yourself a frame of reference before you make an offer, but you'll have fun too, (I hope!).