You've heard the stories from your friends + relatives---"The seller loved us because we wrote a letter & they picked our offer even though we weren't the highest offer!!!"
Yes. I've had it happen. But letters to sellers walk a fine line when it comes to violating Fair Housing Laws. So here's the thing, you can count on me to be as creative as possible to get your offer accepted & that has included letters & videos & more! One offer I submitted included the offer to design, pro-bono, a website for a charity that the seller founded if the seller accepted my clients offer. They had a very basic website & my client is a skilled designer so we thought it might be a unique addition to the offer to tip in our favor.
Last year, I had two Buyer clients submit a short video to the seller---both offers were accepted! The videos definitely helped, but that's not the whole story. For one of the property's, we offered significantly above the list price, waived the inspections & the appraisal---we literally threw in every favorable contingency possible because my clients were in LOVE with the house--it was their dream house & they didn't want to miss it. The video helped to convince the seller to cancel the open house but, frankly, they really weren't likely to get a better offer.
The other client who submitted a video--that one really did make the difference in getting our offer accepted despite the fact that their purchase would be contingent upon them selling their condo.
So yes, letters or videos to sellers can make a difference. But again, we're skating on thin ice & there's also a very good chance that the Sellers agent isn't going to pass along letters. I make it a policy, when representing a seller, not to submit letters. I'll read them & if there's relevant info pertaining to their job security or financial stability, I may let them know. But often sellers are overwhelmed by the enormity of the process & adding in undue emotional stress isn't helpful---one house one buyer & it's difficult to make emotional connections on top of what really should be a business decision.
That said, some real estate Brokerages will not accept letters to sellers because there have been lawsuits in recent years--it can be a violation of Fair Housing Laws. Oregon actually passed a law banning them & I suspect others will follow. (Here's info to review). If a property is an investment property that has been "flipped" it's highly unlikely that a letter would make any difference---an investor is interested in the bottom line and getting to the closing table as quickly as possible.
Rather than submitting a "love letter" to the seller we need to understand what's important to the seller. Do they need a flexible closing date? Does the listing say 'Subject to Suitable Housing'? Would a screenshot of your credit report help to highlight that your finances are in order? Do you have a substantial amount in your bank account to show that you have proof of funds for your down payment? Have you been solidly employed by the same employer for several years? These are examples of important details that we can discover to craft an offer that gets selected. Some Realtors understand that there is an offer strategy but I can tell you that many don't & THAT is YOUR advantage of choosing to have me on your team!
When crafting an offer I can assure you that I will work to discover the reason the seller is selling, how quickly they want to sell, and what might make our offer stand out--this is what will make a difference! In this market it's going to come down to the offer that offers the most favorable terms for the seller: the best price, the fewest contingencies, & the most likely buyer who be able to get to the closing table without any hiccups. Having your financing in place, understanding the market that you're in & home sales in the areas that you're looking, & understanding the offer/contract process will allow you to be ready to decide what's right for you when working with me to craft an offer that will be accepted.
Remember, you’re driving the bus & I’m next to you as your navigator! My job as your agent is to provide you with the various routes that you can take but you’re the driver making the decisions that are best for you! Ideally you've been reading my posts, watching my videos (& others) and taking the time to learn the home buying steps so that when you're ready to submit an offer, you're able to make a decision that you feel confident about!
When multiple offers are expected on a property one of the tools that we can use is an Escalation Clause. This is a document that is submitted along with the offer package. It states your starting offer but gives you an opportunity to increase your offer, by a set amount (increments), up to a maximum amount (cap).
Here's an example:
List price is $279k and comparable properties lead us to believe that offers could go as high as 10% above the list price. You'll want to use your mortgage calculator or get help from your lender to make sure that you understand the difference between the total monthly mortgage payment at different amounts. What is the monthly payment at $285k vs $305k? This will help you to decide if you're ABLE to offer $305k. You'll also want to look at comparable prices in the neighborhood--keeping in mind what it might appraise for, what the future value & equity potential is, and how close on a scale between 1 & 10 does it land on your scale (you can't use 7---that's the indecisive number, it's either 8+ or 6-). This is how you will decide how much you're WILLING to offer.
Here's what the escalation looks like:
List price is $279k; we're willing to increase our offer amount by $xxxx ($1k, $3k, $5k, $10k) over the highest offer up to $x amount.
Starting offer $279k
Increments of $3k
If the highest offer is $300k then your offer becomes $303k. However, if another buyer is willing to pay $309k then your offer is maxxed out at your cap of $308k. If the highest price is the determining factor then the Seller will go with the buyer that pays $309k.
WHY WOULD WE WANT TO SUBMIT AN ESCALATION?
Because we are in a very strong sellers market where most houses, in good condition, will have at least 3 or more offers (my listing at 15 Coes St North Providence had 12 offers!).
Here are some strong reasons to consider an escalation clause with your offer:
1) When there are multiple offers the sellers agent will call for "Highest & Best Offers"--you get one shot & we don't have access to see what the other offers are. You hear about "Bidding Wars" but that's not really how it works.--there isn't usually back and forth.
2) The Escalation Clause is a written document that you will sign. Part of this clause states that the Sellers agent must provide written proof of the "Bona fide offer" that kicks in your escalation. This is so that we don't just have to take the agents word for it that your escalation has been kicked in. So if the highest competing offer, per the example above, is $299k then your offer becomes $302k and they are supposed to provide us with proof of that offer---info will be redacted for the privacy of the competing buyer but again, this is an attempt at transparency.
3) It's a drag to miss out on a house that your really like by a few thousand dollars so this allows you to cover your bases. Have I had people submit escalation clauses who haven't had to go to their maximum amount? YES!! Many times!
Do we have to put in a cap/max amount: No. But I have had this strategy backfire before on a client. We hadn't signed a contract so they weren't in a position where they had to move forward--another buyer put in an escalation that went way over what we anticipated! I've also had it work as a strategy. We have to talk about all of the options to make sure we're using the strategy that works best for you!
Should you start with the list price: yes but I do recommend that you set your increments at $2k or more (meaning that you would be $2k higher than the other most competitive buyer). Why higher increments? It depends on the house & the price point but you may be able to entice a seller to choose you over a similar buyer who perhaps has another more favorable contingency--maybe they've waived the inspection but you're willing to pay $5k more than that buyer so they may be willing to move forward with you even though you have included an inspection contingency.
What else should do you need to know when submitting an offer? I have a video that cover this here. Watch it but here's also an overview:
To make an offer I need to know:
escalation & if so starting offer & maximum/cap & increments
will you include the inspection contingency
will you include the mortgage contingency
will you include the appraisal contingency & if so are you able/willing to offer an appraisal gap
See also: What Are Contingencies blog post
Now that you've read through this let me know if you have any questions! It's a lot to take in but it's my hope that if you have the opportunity to read posts & watch videos you'll be bette equipped to know what else I can do to ensure you understand your options & the process. I'm always here to help!
You will be charmed by 271 Atlantic Ave the minute you step foot through the brightly colored front door! This two bedroom Bungalow features many updates including a five year old roof, young heating system (gas), and updated plumbing and wiring. A warm and inviting layout with hardwood floors throughout, the living room and dining room receive an abundance of light. Off of the dining room are two bedrooms, full bathroom, and kitchen. The kitchen has been updated and leads to a large deck for outdoor entertaining and a spacious, fenced in backyard. There is a walk up attic which adds additional storage space or potential renovation. The basement is partially finished, ideal for an office, music practice studio, or playroom. The backyard features an oversized deck that overlooks the yard which has a fire-pit and ample room for kiddos &/or fur-babies. The property is complete with a one car garage. Great location---fifteen minute walk to Pawtuxet Village with restaurants, bars, and coffee shops along with the convenient amenities of Post Road nearby.
Welcome home to 15 Coes St, a well cared for and maintained home in the heart of North Providence. Step inside to a spacious living room which features an oversized picture window and newly refinished hardwood floors. Entering the kitchen you'll see a built in vintage hutch with the original mid-Century modern starburst hardware. Originally built with the family table as the center of the kitchen, the cooking area is relegated to a galley kitchen--everything close at hand yet plenty of cabinets. Off of the kitchen, you will find three bedrooms with ample closets and hardwood floors. The bedrooms are spacious and all receive an abundance of natural light throughout the day. The full basement is partially finished with laminate flooring, offering ample room for a media room, office, or any number of configurations to meet your needs. There is also additional room for storage and laundry. The roof is ten years old and the gas heating system has been well maintained and is in great condition; an added bonus--this home has Central AC! A charming yard, ideal for kids or fur-babies, it is the perfect City size and has a working sprinkler system. Easy access to all major highways and all that Mineral Springs has to offer yet tucked away in a quiet neighborhood. This is a perfect home for someone looking to downsize or for first time home buyers who want to be in a great neighborhood.
I purchased this 3 unit multi-family property, which I refer to as the #pvdpurplepalace, in the West End of Providence in November of 2018. It was boarded up & there was only one photo listed in mls. I actually showed it to a client. I expected it to be a complete disaster (again, all of the first floor windows were boarded up & the listing said it was being sold "as is" with no further info). But I knew when I walked through the property that I could take it on & that it was a smart buy so I immediately jumped on it (as soon as my client said it wasn't right for her--too much work needed).
The sellers had done a lot of the heavy lifting--new Navien heating systems for each unit (one that turned out to be significantly undersized and that I'd need to replace); updated electric throughout--no knob and tube, new wiring throughout, all new panels & service line; renovated units that were about 60% complete with updated bathrooms and kitchens.
At first look, it seemed like an easy project--some paint, refinish the floors, blah blah blah. Ha! I had on some rose-colored, inexperienced glasses! However, I had all three units rented within four months-- the first floor moved in in January; the second & third floors needed significantly more work & I had them ready by March. Here's an overview of the timeline thus far on this journey.....
First year: end of 2018 & into 2019
Interior paint in every unit plus front & back stairwells as well as a fair amount of skim coating & sanding Refinished hardwood floors in all units--third floor was in especially rough shape
New balcony doors
Storm doors for front doors
New rear doors
Install washer/dryer hook up in each unit
63 windows cleaned (the house had been vacant for 5 years as the sellers slllooowwwlllly made renovations--which they didn't finish--and the first floor windows were boarded up for safety). They were a mess & it would have taken me a decade to do it my self plus it was the end of November & freezing cold.
Pave the driveway: the driveway was concrete ribbon in very poor condition. There was a tree on the side of the driveway that had to be removed that had caused the concrete to buckle. Plus the entire back was concrete & likely once had a garage. It wasn't salvageable & made the most sense to have it dug up & replaced with asphalt. I saved a tiny bit for a yard area but as a rental the parking spots have more value (gross but true). And that tiny bit I saved because of my bleeding heart was a mistake that I still regret because it was just a mud pit after that. Shoulda paved it.
New heating system for the first floor due to being undersized. All the heating systems were newer Navien combo units. Which is great--efficient & cost effective for tenants. Except that the first floor unit kept malfunctioning. Ultimately it had to be replaced.
RISE energy audit: what a great, free!, program! They worked up a contract that totaled about $15k in work & my cost was only $3k. As a balloon-frame house, there was absolutely NO insulation & with such big units I knew the electricity & gas bills would be expensive for tenants.
Landscaping improvements: turned the small mud pit into a gravel pit; removed a front section of "lawn" that was hard to maintain & put down gravel plus a weeping cherry tree which surprisingly is still alive.
Roof replacement: I initially estimated the roof at about 15-18 years old and one layer. But after several major storms the third floor tenants contacted me about a significant leak in their unit. It was coming from the chimney flashing but the roofing company, Liberty Roof, recommended a replacement because a significant number of shingles had been removed. I could have had it repaired but the cost vs the number of years it would have added just didn't make sense. Fortunately my insurance helped me with some of the cost. I also decided that while the roofing company was at it, it was the best opportunity to remove the chimney from the roof line because I knew that eventually I would want to open the wall between the kitchen & the dining room & that was the wall with the chimney. Since the heating systems are vented outside I new it would be possible. I also knew that neither that wall, nor the chimney, was structurally supporting the house. At this time, my third floor tenants moved out, before I secured new tenants, I wanted to move forward with the renovation on the third floor. Fortunately, my second floor tenant, Al, is a skilled carpenter so I hired him to do the finish work & he was willing to live in a construction zone so we renovated both units at the same time. Eventually, I will likely also take that wall down in the first floor unit because it really makes such a difference--so much light & space! I hired a company to do the demo which took them about four days.
Al managed the carpentry work & also installed LVP flooring over the tile which came out great & I know will hold up over the years. I hired a painter to finish--it took about six weeks from start to finish.
After struggling to find a local company that would give me a quote, much less take the job, I hired Zuck Painting out of MA to paint the exterior of the house this November & they did a spectacular job! They did a fair amount of carpentry repair, scraped & sanded quite a bit, & managed 5 colors on the house. Definitely will recommend them to my clients.
Lastly, this year I took advantage of low interest rates & refinanced this property. I bought it for $311k in 2018 & it appraised in May of 2021 for $600k.
The renovations over these past 3 years in total have cost around $80k. The rents are below market rent at $1500, $1400 & $1400 but my tenants are awesome & that's priceless. This video is more for me than for anything else--it will be a good reminder of all there is to learn. So here's a quick montage with some video & hack editing---I'm good at selling houses, not editing videos. The experience of renovating this property has made me a better Realtor---more experienced at understanding the work that is needed for properties, how to work the numbers, what to expect from a timeline, and how much renovations cost (spoiler alert: a lot!). At the end of the day I knew I was buying in an area that would have a great return (on the border of the West Side of PVD) & that with units this large (each unit is identical with 3 bedrooms, double parlor, and massive open kitchen area 1500 sq ft for each). Whether I hold this property for a long time as a rental, convert units into condos down the road, or sell it as a multi (doubtful)--despite the unanticipated costs (which I now know I should have anticipated) the numbers still work.
It's fun to note that in Nov 2019 I purchased a single family home that had to be 100% gutted & so I entered into another renovation journey with many more opportunities to learn & to grow. You can see that project on instagram...I haven't yet finished that video but suppose I'll get to that once the project is completed.
Check out my other videos & subscribe to my channel. And reach out if you have any real estate related questions!
Just steps from all that Hope Village has to offer, check out 93 Lauriston St! This four bedroom Colonial home features charming period details throughout with hardwood floors. The first floor offers a spacious layout with a large living room with a wood burning fireplace and access to a side porch perfect for your morning coffee or afternoon cocktails. The dining room opens to an updated kitchen and also features a bonus office which could also be used as a first floor bedroom, there is also a secret back staircase. The kitchen features custom cabinets with glass panels, granite countertops, and stainless steel appliances. Additional first floor features include a powder room and a lovely enclosed sun porch leading to the backyard. The second floor features three bedrooms plus an additional fourth bedroom which adjoins the master bedroom--this room could be reimagined as a large walk in closet+master bathroom, a nursery, or an office. The full bathroom features the homes stunning original basket weave tile and soaking tub with an updated custom-tile walk in shower. The full basement has ample storage space and also features a finished area with a bar and open living area ideal for a media room or play space. The backyard is fenced in and offers ample space for entertaining. The garage complete this beautiful home ready for you by the new year! Enjoy all that Hope Village offers: great restaurants, bars, local shops, and wonderful parks--all just steps from your front door!
What a blast to tour around Rhode Island in my super fun car with one of my favorite lender partners, Steve Hawes! Click on the link below for a guide to some of my favorite places & things to do this Fall!
New Listing! This is a great house that Christina Lavarnway is helping me to list! Located in the Elmhurst neighborhood of Providence, this house features a great layout, beautiful hardwood floors on the first level, three good sized bedrooms, a nice yard and a two car garage. In need of some updating, this home has great potential---the kitchen needs updating and the carpet upstairs likely hides beautiful hardwood floors. And I personally would keep the vintage bathroom as is except for an updated vanity!
Roof replaced in 2008; furnace & hot water tank replaced in 2017; house wiring replaced in 2019 to remove all knob & tube. Please click on the links below to see the mls listing, property overview, and sales disclosures. Feel free to reach out with any questions!
Take a look at this gorgeous home! Located on nearly 6 acres, with a tranquil brook passing through, 1B Honey Hill Road is a unique property offering a stunning four bedroom Farm House with a bonus finished attic and an additional office or workshop above the two car garage. The crowning jewel of this home is the post and beam horse barn with paddocks and fenced in field--ideal for boarding and training. Featuring hardwood flooring throughout, a stunning open kitchen and dining layout with a cozy wood burning stove as a focal point, this well maintained property is move in ready! Click on the links below to access additional information.
Nothing to do but move in! There's so much to love about this gorgeous East Side home! Completely rehabbed in 2019 from top to bottom, this four bedroom home has it all: new roof, new heating system & central AC, new kitchen & bathrooms, wiring, plumbing, new windows throughout, refinished hardwood floors. The current owners repainted the interior and exterior, added new doors, built an amazing deck & fire pit area, and added first floor laundry with full bathroom. The spacious kitchen is ideal for entertaining with a stunning island. The connecting dining room is also oversized, the room off of the dining room is ideal for a first floor bedroom or home office. The living room has oversized, unique windows and the room features a gas fireplace, this is the perfect spot for a cozy afternoon with a good book! Three bedrooms upstairs offer ample room for a new or growing family and is complete with a custom renovated full bathroom. The basement is well suited for storage and an integral garage is a major bonus, especially during our colder months. Multiple outdoor entertaining spaces are available for your enjoyment--the charming front porch, the large deck off of the back door complete with twinkly lights and a fire pit in the fenced in yard. This location is especially ideal for those who are commuting to the North or South--easy access to the train station or highways.
Buying or Selling? Here's some useful advice!