Should I offer the asking price?
Should I offer 50,000 low and hope to meet in the middle?
Should I offer 5000 below?
Should I offer over asking price?
Do I really need to include an inspection?
These are all commonly asked questions when buyers are looking at homes. These are not limited to first-time buyers either! These questions also come from buyers that have purchased multiple homes in the past. In an ever-changing real estate market there will be times where any or all of the above questions apply.
...So What Should I Do?
Working with an experienced agent will help you determine what the best plan is for an offer, not only when it comes to submitting it but to help ensure it will get accepted. It’s important to work with someone that knows the market, knows the area, and best of all keeps up with current pricing and selling trends. In the pricing area – especially in a market like Denver, CO, your mortgage lender may even have some insight but is truly best served by realtors who deal with this (and various sellers) on a daily basis. They are the experts in seeing what fair listing prices are and what accepted listing prices are. They can speak to the times that are normal for a home to be listed on the market and what is expected to go under contract, as well as what types of offers are far from being considered.
Having this type of insight and expertise on your side will definitely give you an advantage and help you get the home you’re looking for at a fair price. Most importantly, they can help craft an offer that won’t upset the seller in the process. For example, if the average list price is $500,000 and the average price going under contract is $498,000 there is likely no reason to make an offer to that seller for $450,000. It is highly likely they won’t respond and may even blackball you (which means they won’t take any offer – other than the list price from you). It’s a fine line to walk between fair and disrespectful, and the best way to build the empathy is to reverse the roles and imagine yourself in the shoes of the seller.
Where Do Negotiations Come Into Play?
You may be the type that thinks negotiations for a home are like a battleground, where you stick to your guns and get your way or just move on until you find what you want. That may work but may leave you looking at multiple houses and offers until someone considers what you presented. However, if you really find a house you love, in a location that you truly want to be in, then that mode of thinking may be more harmful than advantageous.
That being said, if there are real issues with the home that should be discussed (and possibly a reason to submit a lower offer), that is perfectly acceptable and understandable. By being proactive and explaining this before submitting your offer, it will provide the seller a better understanding of your point-of-view.
Let’s go back to the example above of the home priced at $500,000. Say that house needs paint, carpet, and some remodeling. It might be perfectly fine to make an offer of $470,000 because that seller can truly assess what the cost would be for the updates, the cost of new paint, and the cost of re-carpeting the home.
Good communication is always key to any negotiation. Making sure you’re clear and concise with what your offer is and why will always be of benefit to you and it will likely help you get the “yes” you are hoping for.
Even offers at full price can come with contingencies like, “Inspection must be free from any defects or deficiencies” or “I need to sell my home first”. These scenarios are not uncommon but deferring to an experienced realtor in your area will give insight as to whether or not offers with these types of contingencies are being considered.
We hope some of your questions have been answered and that you’re able to get the best deal on your dream home. If there are any other questions not specifically addressed above that are still on your mind, please feel free to reach out to US.