You have found the perfect home. The next step is making an offer. What should that offer be? Many times, the answer to this question is not so clear. Every house is unique and there are many factors to consider prior to just throwing something out to the seller and hoping for the best. This is where the knowledge and experience of your Realtor can really help.
Many factors should be considered upon writing the initial offer. The first thing you should consider is the comparable properties that have sold in the past 6 to 12 months. Try to think like an appraiser, since that is typically what we are trying to get the seller to do in the first place. Look at time on the market, condition when compared to similar properties, lot location within the community, and possible seller motivations. Though most buyers want to think there is a motivating factor for the seller that will help them in their negotiations, our experience has been that this is just not the case in most transactions. Once you have come to a conclusion as to where you think value is on the property, then you have to decide if you can reach that goal or, if at all possible, get it for less.
Determine your Strategy
Prior to making the offer, you will need to determine how you would prefer to negotiate. If your first offer is accepted by the seller, you will inevitably think you offered too much. The typical objective is to begin the conversation. Hopefully, this means offering low enough to not insult anyone, but still low enough that you can find out where the seller might be willing to go. This strategy won't work if you get involved in a "bidding war." In this situation you will typically have to bring your highest and best offer, then hope you can get the price at your comfort level range without losing the home over a few hundred or thousand dollars.
Some Motivational Pointers
This is what seems to make many buyers salivate! What is it that makes this seller "tick" and need to get the home sold? As I mentioned previously, there isn't typically one sure thing, but here are a few things that are pretty obvious. Is the home vacant and have the sellers purchased another home already? Finding out the existing mortgage amount from the public records can many times give you an idea of what the seller is paying on their monthly mortgage. This can help if you can close quickly, thereby saving them those monthly holding expenses.
Another way is to look around the home while you are there. Are the closets empty, do they have personal pictures around that might give indicators of a family situation where motivation might be involved?
Writing and Negotiating an Offer cont. --->>
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