Control Time: Act in a Timely Fashion
Once again, we’re not in contradiction to the rule about investing time. Yes, you want the other party to invest time. But you don’t want to lose out to a better offer from someone else.
I can remember a broker friend working with buyers a few years ago, a very nice young couple, who wanted a home in a suburban area near San Francisco. Their problem, however, was that the Bay Area is very expensive, one of the most expensive in the United States. Homes in the neighborhood in which they were looking started at about $800,000 in price and went up from there. The most they could afford to pay, however, given the loan they could get and the down payment they had, was $775,000. They were, in effect, out of the market. But, they were determined, and they felt, correctly, that over time a desperate seller or two might pop up who would sell at a lower price.
It took several months, but the broker did find some sellers who wanted to get out immediately and were willing to accept a lower price to accomplish that. The sellers had already purchased another property; it was at the end of December, the worst season for selling a home; and they knew they had to compromise. They were asking $825,000, which was over market, but indicated they would probably settle for $775,000, just inside the buyers’ range.
The trouble was that the buyers were finicky. They weren’t sure about the room arrangement of the house, the size of the kitchen seemed small, and the wife simply couldn’t abide the fact that there was no fireplace in the master bedroom. The broker agreed that these were, indeed, all problems with the property, but that because of their financial situation they had to compromise to get in. Further, sellers willing to sell for a low price were few and far between, and unless the buyers acted quickly, they could lose out.
But the buyers weren’t sure. They saw the house on Sunday, again the next Wednesday, and yet again the following weekend.
But they couldn’t make up their minds about making an offer. Finally, two weeks later, they had talked it out and decided they could live with the property. They called the broker to say they would make a $775,000 offer. The broker, sadly, informed them that other buyers had offered the same amount and the seller had already sold.
Needless to say, these buyers were unhappy and resolved to act more quickly in the future. Unfortunately, spring was coming, there were more buyers in the market, and they never did find another lower-priced house in that neighborhood.
TIP
Strike while the iron’s hot. Real estate is a highly competitive field in all aspects. If you don’t act quickly, someone else will, and you could lose out on the deal.
Negotiating a deal can only take place when there are two parties. If you wait too long, the other party may already have negotiated a deal with someone else.
As a practical matter, when buying a home, jump in with both feet and learn everything about the market as fast as you can. Go out with brokers, visit homes for sale, check with Realty Boards, and familiarize yourself with what’s out there and with what homes should cost. That way, you’ll recognize what you want when you see it and be able to act quickly. Remember, in a hot market where multiple offers are often made, you may have to act after seeing the property for only a few moments. Of course, in a slow market, you may have days or even weeks to act, but even then procrastination can let someone else sneak in and steal your deal.
The Bottom Line
These, then, are the three areas where you can control time, or be controlled by it:
- Investing in time
- Setting a deadline
- Acting in a timely fashion