Making an Offer
Earnest money deposit? Your initial downpayment (and any subsequent deposits) send a message of intent. How serious are you about buying this house? An escrow deposit of $1,000 indicates a minimal commitment, while $50,000 – $100,000 send a potent message of intent to buy.
Negotiating a sale is a joy.. or it should be! And if your Realtor doesn’t feel that way, you may want to rethink this somewhat! Concentrate on, and negotiate the stuff that’s really important to you. Is it price? Is it timeframe/closing date? Are you concerned about what the inspections may uncover? Is your financing solid and already arranged for … or not? Pick your important issues… and stick with them. Concede the smaller, inconsequential items.
Should you submit a low offer on an overpriced property? Overpriced homes are often priced so as to allow “wiggle room” in negotiations. Overpricing a home is counterproductive, in my opinion, and I have found that doing so actually encourages low offers. Buyers tend to do one of two things: 1) wait until the homeowner reduces it to a more “realistic” asking price, or 2) put in an offer well below market value. The savvy, well-informed buyer tends to steer clear of the unrealistically priced homes.
On a well-priced property, how much wiggle room do you have on your offer? While each home purchase is unique, sellers tend to dig in their heels when they get a low offer, countering back higher than they might if the initial offer were closer to the asking price. After a counter offer exchanges hands more than a couple of times, the risk that the negotiation process will fall through increases. An offer is best based on market value coupled with the value you personally place on that home.
Most activity on a house occurs within the first few months of being listed. Competitively priced property attracts offers, and stirs interest. Buyers who understand the market are more inclined to make solid offers on competitively priced homes, concerned that someone else will come in with a better offer. But sometimes it takes a buyer a few ‘losses’ before he or she wises-up.
How an offer is presented to the seller really does matter. Is your offer being presented in person by the agent representing you or is the seller’s agent presenting your offer alone? Is your offer going to be submitted electronically? Is it written or verbal? ( Oh please… not verbal! Seriously!) How negotiations go depend in large part on the expertise of your Realtor. How YOU are being portrayed to the seller matters. Is the transaction amicable or cut throat? Do the two Realtors have a good rapport? What degree of clarity and communication is there? Common ground, and the ability on the part of the parties to NEGOTIATE TO WIN are key! The outcome of your real estate transaction lies in knowledge and in negotiation. There are so many subtle details to a real estate transaction, and negotiating a sale is an art as well as a science.
As a buyer, whether you like the seller (or the seller’s agent) is immaterial . You have to like the house. Period. It’s your Realtor’s job to prepare your offer, negotiate the contract, and guide you through the process. Information is priceless, and it’s your Realtor who will gather much of it for you.
Having a good grasp of the market, and of property values is important… before submitting an offer. Take a look on Facts and Trends, which will provide insight as to what’s selling, and has sold… and where the market stands. That’s a start. And for the REST… (if you don’t already have a Realtor)…Mother/Daughter Real Estate Team Alexandra Restivo Hechtman and Vicki Restivo … can help … whether you are buying or selling in Miami… condos, homes or investment property. To stay current on all the Miami real estate updates and receive my blog posts directly to your inbox, please subscribe below. Whether you’re thinking about buying, or are contemplating selling your house, just call: (305) 793-1365 or (305) 632-0164 … or send me a note here.