Closing in a Competitive Real Estate Market
Real estate markets fluctuate just like any other economic market with which people are familiar. Indeed, sometimes the real estate market is a sellers’ market, usually due to good economic metrics, low mortgage rates, and other conditions. At other times, the real estate market is a buyers’ market, oftentimes because of economic issues, available inventory, and other matters. In any case, closing in a competitive real estate market is more achievable if parties keep a few strategies in mind.
Move Quickly
One of the best tactics to successfully closing in a competitive real estate market is to move quickly through the process. Buyers and sellers typically want to work with counterparts who are sure they wish to participate in a transaction, and any delay could make the other side think that the other party is not serious about the deal. In addition, as the old expression goes, “time is money” and parties want to work with others who will ensure that a deal is closed as soon as possible. Moreover, moving quickly to sign documents and complete other parts of the closing process makes it less likely that price fluctuations will give parties second thoughts about a transaction. The Rothman Law Firm strives to move as quickly as possible on real estate deals so that we can ensure that our clients have the best shot possible at closing in a competitive real estate market.
Have Documents Ready
As an extension of the advice above, another key to closing in a competitive real estate market is to lay the groundwork for the closing before you put in or accept an offer. For instance, buyers should oftentimes be preapproved for a mortgage if they wish to be successful in a competitive real estate market. When choosing between buyers who make offers at the same or similar price, a seller may wish to transact with a buyer who has already obtained a mortgage preapproval. Along similar lines, sellers should also ensure that they are completely able to move forward with the transaction. For instance, if the home is owned by a deceased individual, sellers should make sure that the estate has been established and that the proper documentation has been prepared to close on a transaction. The longer transactions remain pending, the more likely it is that deals will, fail, and parties should lay the foundation for their transactions even before they officially enter into a deal.
Price Decisions
An important part of closing in a competitive real estate market is the listed price of the property and how much money buyers offer to purchase the property. In a normal real estate market, it is not uncommon for buyers to get a small premium off of the purchase price the seller lists for the property. Naturally, sellers wish to obtain the most money possible for the property, but there is typically some flexibility built into the purchase price that allows for a certain amount of negotiation between buyers and sellers.
However, closing in a competitive real estate market usually requires competitive prices. In a competitive real estate market where sellers have the advantage, it is not uncommon for buyers to offer the exact amount of the purchase price listed for a property. In some instances, buyers may even offer slightly more than the purchase price listed for a property. In addition, in a competitive real estate market in which buyers have the advantage, buyers usually have to drop the price of their property, and it is not uncommon for initial listings to be removed so that a subsequent listing can include the new price. A skilled real estate agent and an experienced lawyer should be able to help their clients navigate pricing strategies if clients are operating in a competitive real estate market.
Pick Your Battles
Another important consideration to keep in mind when closing in a competitive real estate market is to pick your battles about disagreements with the other side. During the real estate conveyance process, buyers and sellers need to negotiate a number of matters. Not only do the parties need to come to an agreement about the contract of sale and riders, but they oftentimes need to address deficiencies with the property and whether issues will be repaired or a credit will be offered. In addition, parties often need cooperation to adjourn the closing if needed, execute documents, and complete other tasks in the closing process.
Parties generally want to work with counterparts who are reasonable, and are not going to cause issues throughout the closing process. As such, it may not make sense to make a big deal over trivial issues in a deal, such as cosmetic defects in a property, small sums which the parties need to spend to move the deal forward, and other issues. Of course, major issues should still be addressed, and a skilled attorney should be able to tell their clients which issues should be negotiated by the parties, and which issues are not material and can be excused to move the deal forward.
The Rothman Law Firm is experienced handling real estate closings on behalf of both buyers and sellers in all kinds of real estate markets. If you are looking for an experienced New York and New Jersey real estate lawyer to handle your closing or other legal issue, please feel free to contact The Rothman Law Firm to request a free legal consultation.