Suggestions for constructing seller-tempting offers
If you find yourself in the midst of a seller’s market and you as the buyer find your dream house, the following is a short list of suggested ways to increase the probability of having your offer accepted over other competing proposals.
Carefully consider your transaction methods / philosophy
If you in fact find yourself as a buyer in a seller’s market, it makes logical sense to be very cautious if you are considering making a below-market offer. Ultimately, it pays to do the homework and validate the legitimacy of your offer with accurate and timely data. The better the case you are able to present in defense of your offer, the better the chance of the seller taking it seriously. That means that any supporting numbers you use are taken from sales of similar properties in a comparable neighborhood with like amenities. In this regard, there are multiple real estate data websites that are free to the general public that can supply specific, supporting data of recent transactions. The bottom line for a low-ball offer is that you have to be prepared for the reality of receiving a counter-offer asking for more money, or in the worst of cases, a flat out rejection. In either case, you must respond appropriately having additional research in hand to support your counter offer.
Financing options and implications
If you have the luxury of making a cash offer, theoretically you will have a perceived advantage over most other offers, especially those of a contingency nature. Sellers will certainly be attracted to the “no strings attached” basis of your offer. However, if you try to low ball the seller’s asking price beware. A full – or over asking price financing offer – may still be perceived as more desirable to a seller compared to a lower all-cash offer. This is especially true if the financing is guaranteed through a reputable mortgage lending entity. Bottom line, do your homework and make an offer that the seller will take seriously – considering all elements of the proposed transaction. Verify that all of the requested information and/or documents are completely filled out with accurate data; leave nothing requiring further authentication that could leave the seller wondering about your sincerity and/or professionalism. It should also go without saying that if you have a maximum amount to offer – based on your budget and comfort – do not get emotional and commit to paying more than you can comfortably afford. No one deserves to be “house poor” just because you could not let a “good deal” pass by.
Be careful when asking for concessions
No matter what, be careful when you are making an offer containing a multitude of concessions. Asking for some help with closing costs is one thing, demanding that the seller repair multiple items may cause your offer to be rejected. Though you may feel strongly that certain things need to be repaired prior to you occupying the property, as they say, “pick your battles carefully.” Is it really worth losing the deal – and your chosen future residence – over what may be in the relative scheme of things less important and certainly not items which will prevent you from being able to occupy the home. If the roof needs extensive repair, that is one thing. But, if you want new carpet because it is slightly worn, consider how much the request is worth. You can easily replace carpet before you move in. Just make sure to add the cost into your offer – and importantly, let the seller know why you are lowering your offer. Ultimately, as human nature dictates, the offer requiring the least amount of work by the seller that is the closest to the asking price logically has the highest probability of being accepted.