Rising mortgage rates means lower expectations for sellers

Navigating a shift in any market is difficult. No one wants to leave any money on the table by dropping their price too much. Nor do they want to overpay for something when buying.

So, dressing up a disappointing deal requires a bit of finesse.

For sellers, this means your house will be on the market for more than a single day. You’ll have to be prepared to show your home every day for weeks and even months.

When you do get an offer, be prepared for it to be considerably less than your list price.

And the days when you could stay in your house after the close, at no cost in many cases, may be over. Be prepared for buyers to ask to close escrow in three weeks and for you to vacate the day escrow closes.

For buyers, you might be relieved to learn you no longer have to dash out to a new listing within five minutes of it hitting the market, submitting your offer eight minutes later for tens of thousands over the list price. You might not be required to include a 60-day rent back.

Now, you have more options, even though you may have to move to a lower price range since higher mortgage rates mean bigger mortgage payments.

Or you might look for houses that had been outside your price range but have been on the market for a couple of months. They could be within reach if you can persuade sellers to come down a bit.

Or you might look for listings that have already dropped their price, to see if they might come down a little lower still.

For agents, you might want to “put some lipstick” on a low-ball offer.

You might want to soften the blow by calling it something other than “A Great Offer” in the subject line of your email to the sellers’ agent after 30 days without any contact.

When your email reveals that your clients are offering 18% below the asking price, a lower initial deposit and are ignoring the seller’s contingency of finding a replacement property, it’s not a “Great Offer” at all.

Another approach might be to say something like, “This Might Not Be Exactly What Your Sellers Are Looking for, But My Clients are Non-Contingent and Can Close Quickly – I Hope We Can Make this Work in This Crazy Market.”

Then, you might want to call the sellers’ agent and let her know about the offer, what your clients are thinking, and have their lender proactively call their agent as well.

That’s how you put lipstick on a pig. Be aware: even with some lipstick, you may not be able to get it done.

Leslie Sargent Eskildsen is an agent with RealtyOne Group West and a member of the California Association of Realtors’ board of directors. She can be reached at 949-678-3373 or leslie@leslieeskildsen.com.