Once you have found a home that you want and have decided how much you would like to offer the seller for it, your next step is to decide on your negotiating strategy. If your offer is too low, you may end up losing out to another buyer. Offer too much, and you may end up spending more than you should have for the property. There are offer strategies that can get you in the home that you want, and you don’t need to figure out all the details on your own.
Your realtor can help you determine a reasonable price range to offer for the property by comparing the one you want to similar ones in the same neighbourhood which have sold within the last few months. These numbers can be used as a starting point to determine how much you should be offering for the home.
Factors that Affect How much you Will Offer for a Property
- Are there/are there likely to be other offers pending on the property?
- Will your offer be conditional on your selling your current home? If so, do you feel confident you will be able to sell your own home quickly?
- Will your offer be conditional on your obtaining financing? How long will it take you to get final approval from your lender for the amount of the mortgage you would need?
- Do you need the seller to make any concession, such as pay for certain repairs (or credit you a particular amount in lieu of) as a condition of the sale?
Offer Strategies you Can Adopt
Depending on the home, the current market conditions and how badly you want that particular property, there are a number of offer strategies you and your realtor acting for you can decide to adopt:
- Make a Low (but Still Reasonable) Offer
You can choose to make an offer that is lower than the seller’s price but still in an acceptable range. Depending on how soon the seller wants to move, it may be accepted as is or you may receive a higher counteroffer. This strategy may not be successful in an active market where there may be multiple potential buyers interested in the property.
- Make a Single Offer
Some buyers prefer to make their one, best offer from the outset to try to avoid the negotiating process altogether. Some sellers will still come back with a counteroffer, even if they know this is a final offer. The single offer can work if the home has been on the market for a while with no offers and the seller wants to move on and get it sold.
- Make a High Offer for a Home that is Priced Well
If you want to let the seller know that you are serious about the property, make an offer that is close to the listing price. The seller may come back with a slightly higher counteroffer, but if you know that the house is well priced for the current market, you already know that you are in the right ballpark. There may be other offers if the home is being offered at a fair market value, so don’t get caught up in signing back offers if the difference is only a few dollars.
- Include Conditions Favourable to the Seller’s Circumstances
Your real estate agent can find out specifics about the seller’s situation that can help you in negotiations. If you know they want an early closing date or want to keep certain appliances, including these conditions in your offer can help to sweeten your deal, even if yours is not for the highest price.
Finding the right home is only part of the services I provide as an experienced real estate professional. I also help my clients in the negotiation stage to make an offer they feel comfortable with to get into the homes they want. Call me today to discuss how I can help you find your new home.