So, you’ve found a home that you really like and are ready to make a serious offer. What an exciting time in the home buying process this is!
Before you do make a purchase offer, though, there are some things you should keep in mind. When coming up with an offer and approaching the seller, it is absolutely critical to have effective communication between you, your real estate Agent, and the seller. It's really the key to getting the best deal on the house that you want.
Although market conditions are different depending on where you live, these tactics are truly evergreen and can be used as guidelines to help you know where you should start. However, you should obviously take into consideration your market conditions and make adjustments accordingly. For example, you may be in a very hot seller’s market where homes are often sold for prices higher than their initial asking price. Your real estate Agent should be able to review homes that have sold recently in your area of interest and let you know that “on average, homes are sold for 103% of asking price”. This will give you insight into what the fair market value is for the home you want to buy and where you should start your offer process if you are truly serious about acquiring this specific property.
On the contrary, you may be in a buyer’s market that dictates that “on average, homes are sold for 97% of asking price”. By knowing this information, you’ll have a good idea of what price you will have to pay to acquire the home. It will also help you set a high range for you offer strategy.
When building an offer strategy, you’ll have to do your best not to get your emotions involved. When emotions enter the picture, the most emotional person usually doesn’t win the game. Your logical decision making process will get clouded and will be overcome by the feelings you’ve developed for the home.
Real Estate Purchase Offer Tip #1
Start low and come up later. Real estate sellers almost always counter-offer.
Real Estate Purchase Offer Tip #2
1. The seller can be insulted and fail to respond.
2. The other Agent’s ego could get involved and convince the seller not to respond.
3. The seller could get defensive or hostile.
4. The seller could be harder to negotiate with because of the initial offer.
5. The seller may not care if they sell it to you at all.
Real Estate Purchase Offer Tip #3
The key questions to ask when a home buyer expects that a counter offer will be too low compared to the seller’s initial offer:
1. What will it take to be the seller’s best buyer?
2. What will it take to avoid offending the seller?
Keep these tips in mind when you reach the purchase offer stage of your real estate buying process. They could literally save you thousands of dollars on your home.
Dirk Zeller is an Agent, an Investor, and the President & CEO of Real Estate Champions. His company trains more than 250,000 Agents worldwide each year through live events, online training, self-study programs, and newsletters. He's the widely published author of Your First Year in Real Estate, Success as a Real Estate Agent for Dummies®, The Champion Real Estate Agent, and over 300 articles in print.
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