The goal when placing an offer is acceptance. To reach that goal, there may need to be negotiations. Never be afraid to negotiate! When some Buyers (or Sellers) hear the word “negotiation”, they think “conflict”. I have worked with Buyers who have told me that they don’t want to get into a ‘bidding war’. Negotiation is a great opportunity for everyone involved to get what they want. You may need to counter back and forth a few times to get what you want.
Being a Realtor for 7 years, I realize that negotiation is an art. Real Estate is not only about houses and condos- it’s about people. Two parties have to be satisfied and come to a mutual agreement.
Here are some important tips when making an offer on a home:
Structure an offer for acceptance- When placing an offer, it should be attractive to the Seller. Since you are trying to get the best price possible, the offer should be completed with attention to detail and with the least amount of contingencies. Remember that while the purchase price is very important to the Seller, the other aspects of the contract will be as well. For example, instead of a 15 day inspection period, you may want to offer 10 days. A shorter inspection period could be more attractive to the Seller.
Forget trying any crazy lowball offers- At the low point of the market in Florida, when it was saturated with short sales and foreclosures, some Buyers were able to get lowball offers accepted. Now that the market has stabilized, lowball offers are a thing of the past. Think about it and put yourself in the Seller’s shoes. Would you want to accept a lowball offer on a property that you were selling? Assuming that your answer is “No!”, then why would you think a Seller would accept a low ball offer?
Don’t insult the other side of the transaction- As an experienced Realtor, I know that is extremely important to be considerate, respectful, and professional in all forms of communication. Emotions should be left at the door. As a Buyer, you may notice things about a property that you do not like or are in need of repairs or renovations. If these items are to be addressed, it is very important to be tactful and not insult the Seller. The Seller may have lived in their home for many years and takes pride in how their home is decorated and maintained. Some Sellers have fallen on hard times and have not been able to make repairs. Pointing out every little defect and things that you may not like, could hinder the negotiation process.
Negotiate with data… not opinion- One of my many jobs as a Realtor, is to understand and know the market. When placing an offer, it is very important to research the area and take a look at the comparables. Identify a very good price that is justified by the market comparables and place the offer so it is not insulting to the Seller. Showing market data to the Listing Agent is much more persuasive then saying “I just feel that you are overpriced”.
Timing may be on your side – Is a listing set to expire? Has a listing been on the market for a long time? The Seller and Listing Agent may now be very anxious to get an offer. The longer that a listing sits on the market, the more willing the Seller may be to negotiate.
Use the home inspection report wisely- The home inspection report can be used as a negotiation tool. As a Buyer, you may be justified in requesting for certain repairs to be made, a credit to be given, or the purchase price to be reduced. However, keep in mind that if you are purchasing a resale home, you should not expect the home to be delivered as if it was a brand new construction. So to create a punch list of every single little item that needs to be remedied by the Seller, can set yourself up for a contentious sale. Also, many purchase contracts may be AS-IS with right to inspect, and a Seller may not be obligated to make repairs.
Ask questions – I know to ask questions before placing an offer. At times, I have been surprised at how much information is shared by the other Realtor. Sometimes with asking the right questions (example: are there any past or current special assessments for a condo), you will get important information that will change the structure of the offer.