Finding your dream house is an exciting experience. The property that catches your eye not only suits your needs, but satisfies a variety of personal preferences. For example, it may be within walking distance of quality grade schools and parks. Such a location might be perfect if you have young children. Or it may be located in a quiet neighborhood that receives minimal road traffic. That’s ideal if you work from home.
Remember, the property isn’t yours until you make an offer that the seller accepts. Be forewarned: the process of submitting an offer can sometimes be frustrating, especially without the help of an experienced Realtor.
This article will take you through that process. Along the way, you’ll receive several tips for making sure your offer stands apart from those submitted by other would-be buyers.
Submitting The Purchase Offer To The Seller
Nothing happens without first making a purchase offer. Escrow starts only after the seller agrees to the offer’s terms.
In a seller’s market, properties are snatched up quickly. It’s important to submit an offer as soon as you feel the home you’re considering is a good fit for you and your family. Delaying allows other interested parties to make the first move, and potentially seize control.
In a buyer’s market, you’ll have more time to consider the property’s finer details.
The seller, of course, hopes to find a buyer who is willing to pay full price for his house. That’s rarely a problem in a seller’s market. The owner may only need to list his property and invite people to stop by for a tour.
In most cases, however, the seller must entertain offers that are lower than his listing price. There’s less interest in his property because buyers have more options available to them. Smart buyers realize they can lull sellers into a productive negotiation by offering less than the listed price.
Once you and the owner have settled on a price, your Realtor will prepare a formal offer and submit it to the seller’s agent on your behalf.
The Art Of Submitting A Lowball Offer
Submitting successful lowball offers requires finesse. Many buyers submit them without giving much thought to the factors that motivate sellers. They treat their offers like Hail Mary passes, hoping for the best but silently conceding that they have a minimal chance of success.
In reality, there’s plenty you can do to make your lowball offer stand out to the seller.
First, don’t overemphasize the price you’re willing to pay. An effective offer includes numerous terms that are attractive to the seller. For example, you can offer a short escrow, waive certain repairs, or accept a contingency based on the seller’s ability to buy another home.
Second, be prepared for the seller to make a counteroffer. That should be an expectation whenever you submit a bid that’s lower than the listing price. You don’t have to accept the seller’s counter. Instead, take the opportunity to counter the counteroffer.
Third, explain the reasons you’re bidding so low. Here, the key is to provide reasons that are sensible. For example, don’t claim your lowball offer stems from your inability to obtain a larger loan. Rather, point out that the property has generated few serious offers despite being listed for several weeks.
Competing With Other Buyers In A Seller’s Market
In a seller’s market, it’s common for buyers to find themselves embroiled in a bidding war with other interested parties. That’s a precarious situation. It’s easy to lose focus on the property’s value, and overbid in an attempt to win the war.
If you find yourself mired in a bidding war, step back and let the other parties fight over the property. Remaining an active participant not only increases the likelihood that you’ll pay too much, but will also needlessly raise your stress level.
Remember, your objective is to find a home that meets your needs and complements your lifestyle. It’s not to be the last man (or woman) standing in a bidding war. Make a reasonable offer and prepare to receive the seller’s counteroffer. Then, ask your Realtor for help in negotiating a deal that fits your budget and appeals to the seller’s motivations.