Things to Consider in Making a Sweeter Offer

Never underestimate the power of writing an offer letter to a seller. If you finally find the home of your dreams the next step is to write an offer. Here are three tips to make your offer that much more enticing, but don’t hold your breath, they still have to accept it first.

Consider your approach

The listing price isn’t the place to start negotiations. You begin with sitting down with your real estate agent and looking at similar homes and their values in the area. The most accurate prices will be held within the past three months. Knowing the comparable home sales will give you a better idea of a realistic asking price, which helps you shape a more constructive offer based on amenities and location.

Once you know how much you want to offer, you have to decide how you will pay for this home. Will it be cash or financing? If you offer cash you can get it cheaper (sometimes) because traditional mortgages add a ton to the cost. If you are choosing to finance it, but offer to close in less than 30 days, it’s something to consider in your offer price. If you have a good agent, they can float a quick close to the seller and sweeten the deal.

Ask your agent if it’s worth your time to offer a lowball offer. They should know if this is a good or bad idea based on their knowledge of the market and perhaps even previous experience with the listing agent. Sometimes a lowball offer can begin a favorable negotiation, but often times it can derail your plan quite quickly. If you choose to lowball them, be prepared to hear a quick “no”.

Once you are ready to submit your offer, back it up with everything the seller needs to know. You want them to look twice, if not more at your offer. It will benefit you to include the completed paperwork with everything signed properly, and ask for seller concessions that are appropriate for the market.

Weigh the pros and cons of repair requests

If you are trying to have some of your closing costs covered, and are also looking at getting the old, dirty carpet replaced, ask the seller for a concession. It’s a normal part of the process, but you need to know what’s realistic and what isn’t.

If you find yourself in a bidding war, just know the seller is likely to choose the offer with the least amount of work they will have to do. Ask your agent to help you make a “must do” list and a “would like” list for the sellers to undertake. Putting these concessions side by side with your offer price gives you a better idea at which is more compelling. The bottom rule in negotiating is that you have to pick and choose your battles, so somethings go to give.

Don’t be overrun with emotions

Never ever forget to set a maximum price for yourself. This is the price you won’t over offer because either it’s dumb financially, or you simply can’t afford it. If you are financing, the lender won’t let you offer more than a certain amount. It’s not hard to let the heartstrings start playing once you find the perfect home, but you need to be realistic with yourself and ask what you can truly afford. What is the home really worth, how long do you plan on staying in it, and does it justify offering more?

These tips are for traditional sales, not short sales, or bank-owned homes. Those type of homes are in a different ball park altogether. 

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