Years ago a real estate expert told me that the party who is less motivated almost always gets the better deal. The ONE single element that will determine how well you negotiate your offer is…
How MOTIVATED Is The Seller,
And How MOTIVATED Are YOU?
If the home has been on the market for over a year, perhaps it’s because the seller hasn’t been motivated enough to sell. Or perhaps the home hasn’t sold and he/she is very motivated.
And if you’ve been looking for four months, your kids are late for starting school this year because you haven’t found a home yet, and you now have found the right home, YOU may be very motivated to buy!
Nevertheless, here’s a tip you MUST bring to any real estate transaction…
Move Heaven And Earth To AVOID Emotional Attachment
To The Home You’re Considering
If you’re all giddy about the home. If you can’t hold back your emotions when around the home, then you’re going to get clobbered when negotiating the purchase.
That’s just ONE reason why you need a REALTOR® representing you during any transaction. The middle person alone will help save you money.
So let’s say you have a REALTOR® representing you (make sure it’s a BUYER’S agent, or you could lose a bundle!), and you’re ready to write an offer.
What’s the single best piece of information you can have?
It’s the comparable sales and market data for the entire market and the area. Ask your REALTOR® to print out both for you to use. Now, here’s what you want to do…
You want to take a look at FOUR important
“market telltale signs:”
- Take a look at the currently active (for sale) listings in the area. Was the home you’re considering priced within reason to other homes? If so, you know you’re at a reasonable starting point.
- Now, take a look at what the average selling price is compared to the listing price. You may notice that most homes are selling for about 3% or 4% less than their offer price. If that’s the case, you know the original offers were LESS than this amount. Take this into consideration when making your offer. And leave plenty of room for negotiating.
- Now, make sure you visit several of the other listings in the area. How does your home compare to the other homes? Is the home you’re considering in similar shape? Is it better sited? Is it bigger, smaller, better style, better landscaping, etc.? These factors will help you determine how much you should pay for your home vs. how much others paid for similar homes in the neighborhood.
- Now, take a look at the average market times for homes in the area. If they’re long (evaluated on a market by market basis), the market may be soft, and you might have more negotiating room with your offer.
You’re now ready to make your offer. At this point, I highly recommend you work closely with a BUYER’S AGENT to structure your offer. They will talk about strategies such as: 1) should you offer a high price and ask the owner to throw in all kinds of extras, or 2) offer a low price and skim your way into the neighborhood?
The correct answer depends on your personal situation. And you need to work closely with your REALTOR® to strategize your offer. |
