Offer Process o f the Home Buyer

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Submitting An Offer

Once you write up the offer with your Realtor®, it's up to him or her to present the offer. Your Realtor® must present any written offers. You must rely on them to make you seem like a serious buyer. This is the first step of the negotiation. The Realtor® will take your offer and present it to the sellers and, usually, through the sellers' Realtor®. This can take place in an office, but sometimes the Realtor® will go to see the sellers in their home, where they are most comfortable. And then, perhaps over a cup of coffee, the Realtor® will tell them exactly how much you are willing to pay for their home, the conditions under which you'll purchase the home, and when.

Unless it is a full-price or near full-price offer or they are quite motivated, they will almost never take your first offer. Everyone understands that the first offer is a little bit (or quite a lot) below what you expect to pay for the property.

Negotiating Tips

Whether you’re negotiating to buy or sell a home, the terms and conditions of a divorce settlement, or what salary, benefits and bonus you’ll accept with your new job, negotiation, is about give and take.

And that’s what you want when it comes to buying your home as well. You don't want the seller to take you for a ride, nor do you want to ride the seller, or he will begin to like you a lot less and it will make the move a lot more difficult for him. Emotions run high anyway in something as personal as selling a home. And when negotiations get tough, emotions become embittered arms at war.

Unlike a judge's settlement, where both sides may end up profoundly unhappy with the result, a successful house negotiation can leave everyone feeling like winners.

The Goal

As a buyer, you want the sellers to feel they are getting a fair price for their home. You want them to bask in the glow of having made a good deal so that they will be nice to you when you want to tromp through with the inspector, your spouse, your friends, your decorator, and your parents.

You want that niceness to extend through to the closing, so they do not make you crazy with all kinds of nonsense at the end. You want them to like you so that the sellers will feel good about selling their home to someone who will love it as much as they have.

At the same time, you also want to feel as though you paid a fair price for the home. There is nothing worse than finding out the day after you've signed the contract that you overpaid for the house, except than fighting with the sellers over items you thought were included with the price, but that they intend to take (stealing, you may call it). The nastiness can leave a bad taste in your mouth… and in your home.

Aggressive Negotiation Strategies

Don’t Be Afraid To Initially Offer List – Or Even Above List Price

Yes, you’re telling the sellers you’ll pay at least that much for their home. And you may even go up from there. But nothing gets a sellers attention like an offer that contains the number they’re hoping to see.

Remove As Many Contingencies As You Can

The first contingency to go should be your financing contingency – if you’re been approved (and have received the lender’s commitment in writing) and if you’re sure that the house is going to appraise out and that the lender won’t go out of business before you close.

The next contingency to go should be inspection contingency. Unless you’re worried about a structural element like the foundation or roof, all it takes to fix these things are money.

Offer To Let The Seller Choose The Closing Time

If you line up your ducks ahead of time, you may be able to close within a week or two, rather than in two to three months. By letting the seller choose the closing time that suits him or her best, you’re throwing a big bone to the wolves.

The Low-Ball Bid

If you decide you love a home that's either too expensive or way over your budget, you have a choice. You can either walk away and say you'll come back to it later in your life, or you can make a low-ball offer.

Although there is no one set definition of a low-ball offer, several things can be said to describe one: First, it is usually more than 10 percent below the asking price of the home; second, sellers usually find them insulting, which means the seller's agent must plead with them to reconsider and make a counteroffer; third, it gives a decidedly negative cast to the negotiation process.

The Bidding War

A bidding war occurs when more than one buyer is interested in purchasing the same home. Usually the seller broker will ask for bids from the interested parties. The broker will then present the bids to the seller, who will decide which offer to respond to. What often happens is that you'll find out there is another interested party and your broker will encourage you to make your very best bid. That is, no negotiation. If you want to offer $95,000, then that's what you put in the bid. If you think the other party is going to offer $95,000, and you really want the house, you can offer a little more.

CALL RANDY DURHAM (423) 593-2400

Send mail to randy@randydurham.com with questions, comments or requests for info.

Licensed in TN & GA (423) 664-1900