Information comes with experience
Continuing from last week, let’s work together as Realtors and round out the purchase offer for our buyers.
What’s the best closing date? The buyers have never thought about it, but it’s our job to know. They’re in a lease until the end of January, and obviously they would want to limit the number of days they pay for two homes.
But mortgage interest is paid in arrears. If the buyers close very late in the month, they will pay a small amount for those few days of interest, and then their next payment will not come until March 1 — a nice breather.
Closing too late in the month is bad because things can spill over to the start of the month — which means almost a full month of interest payments in advance. Ideally, we want a Tuesday, seven to 10 days from the end of the month.
But wait: The buyers are taking 3 percent in closing costs. Who cares about pre-paid interest? The buyers might not know to care, but we get paid to care. Our costs are so low that we might be able to apply a big chunk of that 3 percent to buying down the interest rates, leaving the buyers with extra money in their pockets with every monthly payment.
How much in earnest? A thousand dollars, right now. It’s a buyer’s market.
Now this is not a hugely aggressive offer. Buyers are rarely willing to push things as hard as they might. But, the aggression in this offer was put there by us, not by the buyers. Most of the very subtle ideas the buyers will have known nothing about until we explained them.
That’s representation — real, not perceived. Truly, the buyers had no idea how to construct an offer for their home.
Every home is unique, and every real estate transaction is unique. There is no way that unrepresented buyers and sellers can do as well for themselves as they could with professional representation. The information that matters doesn’t come from the MLS, it comes from the accumulated experience of a Realtor.