Expert: Todd C. Menard - 5/14/2009

Question
QUESTION: We put our Ahwatukee home on the market April21 for 210k. It was worth maybe 225 2 months before that.It shows well and is a turnkey home. We got an offer on that day for 197. Realtor said we need to counter low because of not knowing what the appraisal would be. We countered 202.5 thinking she was saying appraisal would be low. It came in yesterday at 210k. Don't know if we should bump this buyer (hes on the fence about it) or just go with it, if its a declining market anyway. Feels bad that price is that much lower than the appraisal. But something to be said if it actually sells this fast. i don't know what to do in this market. What do you think???  Thanks loads!

ANSWER: Hello Martha - That is truthfully a question for your REALTOR. In real estate I have seen sellers overlook a quick offer for less that asking price. The seller feels that since they received an offer so quickly there must be others out there that will pay more. Many times, the seller rejects the initial offer and does not receive another for a long time... maybe never. There is no crystal ball, as you know. According to the AAR Residential Purchase Contract 05/05 there is no clause to increase your price should the appraisal be higher than the accepted offer (Contract). This is the best time of year to sell, or buy a home. Parents desire to relocate children during the school break and this is the time to buy to facilitate that objective from a buyers point of view. Only you can make these decisions. If you have an interest in doing something that is not in line with the contract you should seek legal counsel prior to doing so to be certain of your options, and exposure to liabilities, under the contract. Please remember, neither myself nor your agent is a real estate attorney, so we are not allowed to provide legal advice. Please seek an attorney who specializes in real estate practice for your answers. Please contact your agent and continue to ask your questions until you feel comfortable with your understanding of the terms and conditions of the contract. I hope this helps. - Todd

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QUESTION: Hi Todd, thanks for your response. I did not rate because you might have misinterpreted my question - so Im following up! The buyer is on the fence and would withdraw from the contract if I wanted to end it. No legal issue here. The reason I don't ask the realtor about what to do is that we ended up with a dual agent situation. They represent both of us and Im sure they would like to see it go through. I don't feel represented. If you have thoughts on my original question, I would love to hear it - Thanks!

Answer
Hello Martha - There is no representation benefits to a dual agency scenario, rather quite the contrary. The market could be interpreted as improving with the understanding the increase in sales in due to the seasonal market and the new finance programs for qualifying borrowers/buyers. The inventory levels of REO properties is dropping significantly and the available short sales have multiple offers pending which is reducing the inventory and increasing prices. Of course the price increases mean that the lenders and banks are not accepting prices 40% below fair market value as done previously. Short sales also take too long for approval and todays seasonal buyers want to move their children before school starts in the fall. Overall you could say this market is good for sellers and still motivates potential buyers. WHAT TO DO IN THIS MARKET... If you decide to communicate directly with the buyer and the buyer is willing to increase the price then problem solved. Negotiate a win-win for both of you... agree to meet the buyer half way or agree to waive all seller contributions to bueyrs settlement fees (if any) and any request for the seller to pay for items on the buyers behalf (Home Warranty) and the like. IF the buyer is unwilling, you have to decide if the timing of this offer is appropriate for your needs or the possibility of losing the buyer and receiving no additional offers. You should have a conversation with the agent or their designated broker who supervises all licensees with the company and state your interpretation and lack of representation. Article 1 of the National Association of REALTORS Code of Ethics states that an agent must remain diligent in representing their clients best interests. Which client is receiving the diligence and representation? Most issues can be resolved by communication, if you have a better communication with the buyer talk to them then tell the agent what you both agreed to. I hope this provides a better look into the market and your situation. Please don't hesitate to reply. - Todd