Escalation Clauses - Your Saving Grace in a Hot Real Estate Market

Christina! Just find me a house - any house!!

Are you getting frustrated or disheartened about making an offer on your new home? You'd like to take advantage of these relatively low prices and interest rates, but it seems like the rest of the world is too!  Not to mention you may also be competing against cash buyers.  Some reports indicate that they represent half of the US home buyers.

How come it seems that some agents are getting their buyers the house they want almost ALL THE TIME?  They have a little trick up their sleeve, and some agents who have been out of the loop for a while may not know about it, or even how to use it.  The "trick" is called an Escalation Clause.  What is an Escalation Clause, you ask?  It's a clause that stipulates that the buyer will automatically increase their offer, up to a limit, should the homeowners receive a higher offer.

For example: A home comes on the market "right-priced" at $250,000 and you feel there will be multiple offers, but you're not 100% sure. Your agent can help you write a clause that states the buyer is willing to increase their offer in increments of $2,000 up to a maximum of $265,000.  Now you and your agent need to research the market to be sure the home would appraise for your purchase price to make sure you're not just caught up in the heat of it and over-paying for the home.  You'll also want to make sure you are qualified to get a loan for the higher amount and that you have enough of a down payment and closing costs.

Our team has a lot of experience with receiving offers with this type of Escalation Clause.  During the height of the REO sell-off, investors were trying to scoop up anything they could.  Nearly 100% of the time that we received an offer with an escalation clause, the bank accepted that offer. They really just cared about the bottom line, but of course, they wanted to make sure if it was a financed offer that the home would appraise.

If you are afraid of starting your home search because you've heard all the stories about people getting outbid, Click Here to get in touch with us.  We'll put you in touch with an exceptional agent in your area who is knowledgeable on this practice.

Reality Check: Why Home Inspections Matter

Reality Check:  Why Home Inspections Matter

One of the best pieces of advice you can heed when it comes to buying a house is to order a home inspection.  Regardless of whether you’re a first-time homebuyer or an old pro, you might have on rose-colored glasses when it comes to buying a house – your future home.  Luckily a certified home inspector has no emotional attachment to your new place and can impartially and appropriately identify structural, electrical and plumbing inspections.  Plus, this person can offer insight into the safety and value of the house.

During your home search, you’ll probably notice the great front yard, charming breakfast nook and spacious bedrooms.  What you won’t notice, however, are the termites in the basement, nests in the chimney or cracks in the foundation.  That’s why it’s important to speak to your real estate agent, who will be able to recommend inspectors who can reliably and responsibly check the nooks and crannies, walls and roofs.

The inspection will cost you several hundred dollars, depending on where you live, but it’s a small price to pay to ensure your home is worth the investment.  Usually conducted after an offer is accepted, the inspection also provides leverage for negotiating concessions with the seller before the sale is finalized.  Based on the inspector’s detailed reports, you’re able to alert the seller to all issues you’d like fixed or addressed before the sale is closed.  Let me be clear however, this is NOT to be used to negotiate painting or replacing worn carpeting or other cosmetic challenges.  Negotiations are for hidden, undisclosed defects that will be very costly to repair or replace – not a loose door knob.

In other words, a home inspection allows you to know exactly what you’re buying – and if it truly is the perfect place for you.

If my team can help guide you through the buying process, please click here.  If you need a referral to an exceptional agent anywhere in the world, please click here so that I can get you in touch knowledgeable agent in your area of the world.

This article is courtesy, in part, by RE/MAX 

Shutdown Update: Effects on Housing

Shutdown Update: Effects on Housing

Last week, the National Association of Realtors (NAR) began providing information to its members about the possible effects of the government shutdown on housing. In an Oct. 1 post on the RE/MAX Blog, RE/MAX passed along that information – and some perspective – to you.

At that point, the shutdown was in its first days and the discussion centered on potential effects only. This week, the discussion is about the realities.

The shutdown is, in fact, delaying closings because lenders are unable to verify loan information only the closed Internal Revenue Service and Social Security Administration can provide. This means some pending mortgages likely won't be finalized until the IRS and Social Security offices reopen. Here's an Oct. 9 NPR article that offers more information.

So when will the shutdown end? Of course, that's impossible to know. The 1990s shutdown lasted 26 days. It's Day 10 of the current shutdown. The past doesn't necessarily predict the future; however, it's not unrealistic to think this all could last another week.

If you're currently in the process of buying a home or selling a home and want an update on the status of your transaction, call your real estate agent. He or she should know how what the shutdown is affecting your transaction, and should be in regular contact with you, the lender and other parties involved.

The shutdown doesn't have to completely derail your home sale or purchase, particularly if the lines of communication are open. If you have the flexibility to wait it out, it's reasonable to expect that when the shutdown ends, you and your real estate agent will pick up right where you left off in finalizing your home sale or purchase.

If you're not currently in the process of buying or selling property but you're interested in understanding your options during the shutdown and in the future, click on the Email Me Button and I can walk you through it all – and potentially right through the door of your new home. If you're not buying in Massachusetts or Hawaii, I can get you in touch with another exceptional agent in your area who will take great care of you - anywhere in the world.


This article was provided courtesy of RE/MAX

Pacific Business News Reports Investors from China have 'insatiable appetite' for Hawaii Real Estate

The Pacific Business News recently reported that Investors from China have an 'insatiable appetite' for Hawaii Real Estate.  According to Derek Muhs, co-founder of Affinity China, a company meeting the lifestyle and travel needs of its wealthy Chinese members, the Investors from China are buying Single Family Homes worth between $500,000 to $1.5 Million.  The article reports that these Investors are expected to spend $175 Billion - that's with a "B" - in Hawaii Real Estate and around the world in the next few years.

The article also makes reference to the expectations of Investors from China.  These Investors particularly like when your business changes to cater to their cultural expectations.  I found this out first hand when I spent some time with my friends from China this weekend in Hawaii.  Every restaurant we went to had menus available in English or Japanese Only.  They were deeply offended that the restaurants hadn't made an effort to change their menus to include a Chinese translation.

It looks like I'll be ordering another set of Rosetta Stone........Businesses must adapt, grow or die.

If you'd like to read the full article by Duane Shimogawa of the Pacific Business News and learn more about Derek Muhs' business, follow this link:  Pacific Business News Full Article

If you're looking for more information on how I can help you with your real estate needs or referrals, please click on the Email Me Button.

Aloha!

Award winning REALTOR Christina Lazrak, FOX TV 25 interview

I can help investors from the US Mainland , Canada and Greater China invest in properties on Waikiki, Honolulu. Oahu, Hawaii.

How Recruiters See Your Resume - Business Insider

How Recruiters See Your Resume - Business Insider

9 Reasons Why The 9-Year-Old Founder Of Caine's Arcade Will Be A Billionaire In 30 Years - Forbes

Great lessons for Realtors, investors and Entrepreneurs 9 Reasons Why The 9-Year-Old Founder Of Caine's Arcade Will Be A Billionaire In 30 Years - Forbes