Congratulations! You found your Windsor home after lots of hard work. Now what? Well, if you have followed this website, chances are you have already secured your pre-approval letter. So now that it’s time to negotiate, you know that maximum you can offer.
So what happens next? It’s time to make an offer. By working with your real estate agent, who is hopefully very experienced with negotiations, here are some step-by-step tips that are necessary so you can get the absolute best deal on your home.
1. Get data:
A buyer cannot just rush in and make an offer without doing some research. It’s always good to know why the seller is selling. Are they downsizing? Having financial issues? Transferring jobs? Buying a larger home? In other words, finding out if the seller needs to sell immediately or not can help a buyer make a decision on what is the best price to offer.
2. Buyer’s market? Seller’s market?
A buyer needs to know what kind of real estate market is in place as that can easily change the tone and price of your offer. When in a buyer’s market, you will have less competition, as there are more homes for sale than buyers. Sellers are usually more willing to entertain your offer in a buyer’s market because they are often unsure if or when they will get another offer. In a seller’s market, where there are not enough homes for sale, but plenty of buyers, a seller may not consider anything other than the list price, which leaves little room for negotiation. In fact, bidding wars are very popular in seller’s markets, which means your offer needs to be very good in order to be considered.
3. How much did seller pay?
This can be important because if the seller purchased the home within the past few years, in a depressed real estate market, there has been little appreciation. Chances are, the asking price you present should be close to what the seller paid for it. Of course, you can adjust if there has been remodeling or appreciation.
4. Study trends:
What does this mean? Carefully go over the prices of homes that were listed in the past six months and compare them to prices that they sold for. Are homes selling over or under the list price? Chances are, the vast majority are selling under, but by what percentage? If that number is around 3 percent, then that could be a good indication of what a seller may accept.
5. Square foot:
While you cannot take the average square foot cost and multiply it by the amount of square feet a house contains, you can determine if the square foot costs averages are on the rise.
6. Ask for home’s sale history:
When preparing your offer, check to see how long the home was on the market. While you may already know this answer, you will want to find out if the home was ever an expired listing, then put on the market again. How many “days on the market,” are important, because if the property has been delisted and then relisted, chances are the sellers are motivated.
Once you have these numbers, it’s time to make an offer that you feel comfortable with and that you can afford. Keep in mind that a real estate agent is there to guide you, provide market information and suggest price ranges but the final price is determined by you. Professional real estate agents will never pinpoint an exact price because they don’t want to be responsible if:
Offer was too high:
If the seller accepts an offer immediately, buyers often wonder if they offered too much. If a real estate agents is insistent on a price, then a buyer will wonder who the agent is actually working for: the seller or the buyer?
Offer was too low:
If an offer was too low and the home was sold to someone else who bid higher or your offer wasn’t even entertained, a buyer can blame the real estate agent.
Remember, the real estate agent is not buying the home nor paying the monthly mortgage. Their job is to get the best price for your home and most professional real estate agents practice this.
So now that you have the price, you are just about ready to submit your offer. What else needs to be included?
1. Make a list of items you want to stay:
When walking through the house a final time before making your offer, make a list of items you want included in the price. Your items might include:
- Window treatments
- Chandeliers or other light fixtures
- Outdoor storage buildings or play structures
- Furniture custom made for the home
It’s better to be safe rather than sorry and include items rather than find out at the final walk through that the chandelier above the dining room table has been replaced with a cheap, generic version.
Of course, work closely with your real estate agent and make certain that any contingencies you have are carefully worded and placed in the contract. Make sure you and your deposit are protected! Whether you have a home to sell, possible inspection or financing issues, it must be covered.
Finally, go over your contract carefully with your agent and make sure that you feel comfortable before you sign on the dotted line. Once your offer is submitted, take a deep breath and …… wait. It’s a nerve wrecking time wondering if the seller will accept your offer. Suggest that in your contract that sellers respond within a 48 hour period. The last thing you want is for them to wait and see if they receive a better offer.