There is a lot that goes into negotiating an offer. It is important to analyze your particular strengths as a buyer and also the motivation of the seller. Some attributes to consider as a buyer: Your down payment amount, your ability to be flexible with the closing date, and contingency requirements. To gauge motivation of the seller, you’ll want to examine price, days the house has been on the market, how much the owners owe, the reason for moving and how many competing offers are on the table. Your agent should gather all of this information. Just how an agent acquires these details is exactly what separates an outstanding agent from a good one. His or her process also speaks to the validity of the information.
Negotiating skills are unfortunately not always the primary concern in the industry since the goal is often to close but these procedures will save you money. There are numerous effective ways to go about gathering information without indicating too much interest up front.
Here are a few of the steps I like to take.
- Determine a Reasonable Target Price Pull comparable sales for the property and do an appraisal, taking into consideration as many details as possible, including style, location, cooling system, number of beds, baths, fireplaces, etc. Once the price is fine-tuned, move on to step 2.
- Request General Information When calling the listing agent to request more information, I don’t immediately ask if there are any offers and definitely do not disclose that there is an offer on the way. The purpose of this call may be to find out if there are offers, but it’s beneficial to let the list agent indicate this information first. In initial calls, it’s also helpful to determine the seller’s living situation to gauge motivation.
- Gather More Data! Check out the public records in an effort to determine what the seller paid, how much they owe, and when they bought etc.
- Submit an Offer A starting offer is one of the best ways to gauge motivation. Ideally you can determine the lowest offer possible that is not insulting. The seller’s reaction to the first offer can bear the most valid information of all.
Details are everything: an agent can indicate a lot with his or her actions. I like to use deadlines and timing to show motivation. A shorter deadline implies you have other properties you want to get to if this one doesn’t work out. Also price progressions can indicate when a buyer is getting close to the maximum offer amount. Finally, the strengths of the buyer should be made clear since this is what ultimately gets the seller to accept the offer.
This is some of the information and strategy I employ. Buyers should keep in mind that they play a role in negotiations and should avoid showing too much interest to listing brokers directly at open houses and showings. Let the buyer’s agent handle the deal. Choose an agent that you trust and feel will work hard to negotiate for you. Having a clear strategy and gathering detailed information could save you a substantial sum and get you the best terms.