Real estate inventory is low in many areas of the country so we are seeing bidding wars again. Whether you are on the buying or selling side some of these tips might help you.
Low Ball Offers – everyone wants a “deal,” but in a sellers’ market this won’t cut it. The question should be, is the listed price a fair reflection of the home’s worth?
As the Seller: if you receive a Low Ball Offer, don’t take it personally. Remember, everyone wants a deal. It may just be a negotiating tactic. Your agent should have a conversation with the buyer’s agent as to why the offer is low and see where and if the offer is worth countering.
As the Buyer: Making a bunch of Low Ball Offers isn’t going to find you a deal. Find the right property and offer a fair price. You always want room to negotiate but you have to get a counter offer to even start negotiations.
Flexibility – As Seller or Buyer: It’s not always about the “price.” Terms might even be more important to either the seller or the buyer. Timing of the closing, move-out/move-in dates, request for repairs, you get the idea. These kinds of things can be of equal importance. This is where your broker/agent can be of great help navigating a deal.
Commitment – As the Buyer: if you want a seller to stand up and take notice of your offer, a large earnest money deposit can get someone’s attention. Also, the bigger the down payment, usually the more attractive the offer.
As the Seller: Counter sooner rather than later.
Be prepared – As the Buyer: Have the funds available for the deposit, have proof of down payment funds, and most important, be preapproved by a lender. Also, there is a difference between prequalified and preapproved.
Counteroffers – As the Buyer: not everyone who made an offer will always receive a counter so, if you do, that means you were close. Now you need to make a decision to take it or leave it. My husband often says that buyers don’t have the “take it” mind set and you must in today’s market.
As the Seller: Make counteroffers you are willing to accept.
Negotiating with the offer(s) you have is important – As the Seller: There is an old saying in real estate that “your first offer is your best offer.” It’s said to be true about 90% of the time and I will say I have found that in my own experience. The instinct of a seller is that if an offer (or many) comes in quickly, they must have listed too low and should hold out for a better offer or multiple offers. The longer a property stays on the market, the less likely you will get a full price offer. Much of this does depend on the market and market timing. But remember, the longer a property is on the market the more it’s costing in holding costs so your profit is being diminished. Also remember, it’s not always about the money for the buyer.