Best and Final: the Dreaded Multiple Offer

Salt Lake City Houses for Sale and Multiple Offer Sudden Death

“Final & Best” Scenario Can Affect Utah Houses for Sale

Those who have been paying close attention to how the houses for sale in Salt Lake City and beyond have been performing,  may have observed the results of the dreaded “multiple offer situation.”  When a closing price seems to rise unexpectedly, it could be because of something called the “Notice of Best and Final.” 

That notice can be issued by a listing agent as soon as more than one offer is on the table. Experienced real estate agents sometimes choose this strategy to win the best price for their client.

It instructs all interested buyers to submit their “best and final offer” by a deadline (usually within 24 - 48 hours). Since no counters or escalation clauses are allowed, one blogger has aptly called it Multiple Offer Sudden Death. Here’s how it works:  

·        The seller’s asking price is listed at, say, $320,000.

·        Buyer A is interested; bids $310,000.

·        After a few rounds of negotiation, the seller and Buyer A near agreement at $316,000, when-

·        Buyer B, not knowing that the seller is nearing agreement with Buyer A, submits her own bid.

·        The seller initiates Notice of Best and Final, giving both parties two days to submit their last offer.

·        Buyer A begrudgingly goes up to the full list price: now offers $320,000.

·        Buyer B shoots all the way up to $329,000 – the offer which is accepted.

In this scenario, Buyer B not only paid $13,000 more than Buyer A was about to pay, but also paid $8,000 more than needed to beat Buyer A’s top price.

Great news for the seller, for sure — but less exciting for the buyers, since what was a great deal just becomes so-so. That’s why I advise my buyer clients to do their best to remain emotionally detached. I suggest deciding on the true value you believe the home is worth, then sticking to it, no matter what!

Whether you are selling or buying houses for sale in Salt Lake City area, I’m here to watch out for your best interests in every situation. Call me today to discuss a plan that works for you!

Missed Mortgage Payments Can Attract Scam Proposals

Heads-up: Scammers Follow Homeowners Missed Mortgage Payments

When natural disaster strikes, you can be certain that two groups will soon be there: the Red Cross — and scam artists. Unfortunately, the same holds for turmoil of all kinds. 

All homeowners, regardless of where you live in the US, who have missed mortgage payments should be aware that, in addition to getting their accounts back on track as soon as possible, they should be prepared to be targeted by unethical operators.

Missed mortgage payments can cause a homeowner’s name to appear as ‘arrears’ on public tax records: it’s one way unscrupulous characters locate their victims. That can set off an onslaught of solicitations through the phone, mail, and possibly even at the front door! Normally level-headed householders can be misled by the prospect of a quick fix, especially since stress levels can be high. Knowing the telltale signs that a mortgage scam is in the offing can stop it before it gets far.

One indication is any ‘cure’ that requires a large up-front payment to the mediating agent. Likewise, any proposal that involves repayment to anyone other than the lender — no matter how convincing the reasons offered — is not likely to be authentic. 

In one devious mortgage scam, the agency tries to convince you to sign over ownership of your property with the promise that you will be able to rent it back in a “lease-to-own” arrangement. That may sound convincing since some banks are experimenting with a similar option. But anyone other than the mortgage holder who proposes that you sign over the property deed or title to them is probably not working in your best interest. Likewise, an agency that seeks your power of attorney should raise another red flag — in this case, the agency could have the power to circumvent your wishes.

If you’ve missed mortgage payments, your first action should always be to talk to a reputable attorney and financial advisor to sort out your available options. If selling your home is one — either by conventional or short sale — it’s my job to help make accomplishing that easier. Don’t hesitate to contact me with your private real estate needs.

Home Sellers Spy Daylight Through Tax Season Haze

3 Cheerful Tax Facts for Home Sellers

This year April 15 falls on a Monday —for many, that undoubtedly bodes ill for the weekend preceding. Tax time may be the leading contender for everyone’s least favorite time of year, yet there are some potential breaks of sunlight shining through the tax time overcast. Most of us know these already, but it’s still encouraging to remember the substantial advantage that home sellers stand to gain: 

·       Most home sellers who have owned and lived in their primary residence for at least two of the preceding five years can exclude $250,000 of any gain (up to $500k for those filing joint returns). This is a gigantic incentive for homeownership. The major exception comes for those who have taken this deduction within the previous two years.

·       You may be able to deduct losses from an income property, though home sellers may not deduct losses from the sale of their primary residence. Why not? Ask the rule-makers!

·    

   Special rules are likely to apply to home sellers who received the one-time First Time Home Buyer Credit when they bought their property. This is another area where you should seek qualified tax advice; one example is the special consideration that may be granted for those who have not previously deducted all the points paid for their mortgage. Details are in IRS Publication 523 — at last check, the rules are unchanged (the ‘Recent Developments’ heading is refreshingly empty). 

This all goes to reinforce the point that Utah home sellers should always be sure that they leave none of homeowners’ tax benefits on the table. Uncle Sam provides them to encourage taxpayers to behave in ways they believe to be beneficial to all of us: home ownership is decidedly one of those. 

As always, be sure to consult your tax professional for all major moves. And when you’re ready for a real estate professional, I’m here to help every step of the way!