1. Offer a fair price based on the comps with allowances for location and upgrades!
I always tell my buyers to leave some room for negotiating. I do find that low ball offers get rejected or the sellers just aren’t ask flexible on their counter offer.
This is where a great realtor earns their money! Have them educate you on the market. How many days has the property been on the market? Have they had other offers? What percentage of the asking price are homes closing for? Study the comps.
2. Understand your Local Market, define your wants and needs to your realtor.
Is it a Buyer’s Market, a Seller’s Market, or just a Market? Ask to see all of the inventory that meets your criteria.
3. Understand the Seller
Moving out of town, moving up, investor unloading an asset, bank owned, short sale, Court-ordered sale… does your Agent know the motivation or reason of the Seller? Let this information help you decide on a price to offer.
4. Have your Pre-Approval Letter or Proof of Funds Letter before you start looking.
It never fails that I take someone out and they find their dream home but they don’t have this ready to go with the offer. It is Sunday afternoon and they can’t get it. Many times they lose the house of their dream to a prepared buyer. The seller needs to feel confident that you can afford their house before they accept your offer and take it off of the market.
5. Don’t ask Seller to Pay All Closing Costs
Asking the Seller to pay $$$ Thousands of Dollars in Costs is effectively lowering the Price!
6. Offer a fair Deposit. In our area standard is 3%
In some States (including Florida) there is no monetary deposit required. Your “promise” is considered valuable consideration. But how do you think those Goose Eggs on the Deposit Line look to a Seller? The strength of your Offer is reflected in your Deposit! Even with a 100% USDA Rural or 100% VA Loan, you should still offer a significant deposit.
7. Contingencies
Financing and Inspection contingencies are common and expected. 17 days is standard in California per the Real Estate Contract. Altering this time frame may hurt your chances of getting your offer accepted. Other Contingencies can be detrimental to an offer. For example, “Buyer’s Home Must Sell First”.
8. Beware asking for Personal Property
The Seller has volunteered to leave the light fixtures, window treatments, and the appliances. Consult with your realtor to talk to the selling agent regarding what is negotiable in the sale.
9. Be aggressive with the closing date. 30-45 days is standard in our area.
If the Seller has already moved out and your offer shows a Closing Date several months from now you will not have a good chance of getting our offer accepted..
10. Don’t ask for repairs before the inspections have been done! Or, when the MLS Listing reads, “As Is, Subject to Inspections”.
Stop trying to Get a Deal on a Foreclosures. Generally speaking the banks have done their homework and the asking price is not negotiable and many time is less than appraisal value. Often foreclosures go for more than the asking price. Forget what those infomercials are saying! The hucksters on those “Get Rich Quick in Real Estate” Infomercials are either in prison or under indictment.
11. Don’t ask for Early Possession
There is a lot of risk and potential liability for a Seller who allows Occupancy Prior to Closing.
12. Be careful with “Creative Financing”
Asking a Seller (who has not volunteered) to carry Owner Financing, or asking a Seller to do a Lease Option or Lease Purchase, or a Contract for Deed, or other “Creative Financing”.
13. Don’t ignore Seller Requests
Seller has made specific requests in the MLS Listing (preferred Title Closer, length of Closing, days for Acceptance, etc.) and your Offer blatantly disregards those requests.
14. Be sure you Understand “Multiple Offers” if you are in a Hot Market
Again this is where an experienced realtor can help you. If you are in a Market where Multiple Offers are typical, you MUST come in with your Best at the very beginning! A low-priced, contingency-filled offer will not warrant a second look!
15. Be sure your Offer is Presented (yes, it happens)
It may be illegal and/or unethical, but sometimes Agents do not present Offers!
Your Agent may be “embarrassed” over your Low-Ball Offer, so he pretends it was rejected.
An unethical Listing Agent has multiple Offers; she only presents the Offers that will net her both sides of the commission!
It is up to you to verify that your Offer was presented! The seller’s agent is required by California real estate law to out in writing when your offer was presented even if it was rejected.
Most of this is common sense and most definitely a great realtor can guide you with your offer and help you find your dream home!