Is it priced right? How long has it been on the market? Are there repairs that need to be done? All vital questions when it comes time to make your offer!
Today's real estate market is a complex maze of obstacles like contingencies, counteroffers and closing costs! With so much to think about during this time, sometimes the one questions that has the most impact is, “What should I offer for that house?”
With a myriad of thoughts racing through your head like “what-if…” and “should I or shouldn’t I…”, it’s often very difficult to stay focused on why you are here in the first place…You want to buy a house and have a piece of that American dream!
Can my offer be below the asking price?
With market times barely running a week and inventory shockingly low, it has become a sellers market which has made the often murky waters of what to offer quite a bit clearer. Homebuyers don’t have the luxury of trying to get a good deal these days…but it doesn’t stop them from trying!
In fact, depending on your market, many homes are getting multiple offers and ending up selling for more…sometimes way more…than their original asking price!
However, if homes in your area are not experiencing such a market and you find yourself seriously looking at making an offer on a home that has been on the market for a while, you may want to consider testing the sellers by making an offer below their asking price.
Making an Educated Offer
Certainly no one can be sure the mindset of a seller or the reasoning behind why they are even selling. It’s often very good real estate practice to have your real estate professional approach the seller or the sellers agent with these 5 requests:
1. Why are they selling?
You can glean quite a bit from the sellers reason for selling:
- Relocation – Need to sell!
- Divorce – Really need to sell!!
- Downsizing or Upsizing – You may not find as much ‘wiggle room’ in these instances simply due to a possible lack of urgency
- Financial i.e., Short Sale – The seller really has no say in what the final price will be here so offer away!
2. Have there been any offers since they went on the market?
This is a fairly vital question because it can tell you 2 things right away:
A buyer had found something during the inspection that was a deal killer (for them at least) and rescinded their deal!
Buyer and seller could not come to a ‘meeting of the minds’ on a final price…maybe this is due to stubbornness on the sellers part or a ridiculously low/bad offer on the buyers part?
A possible third reason could be the buyers financing did not come through, but there would have likely been a sold strip on the for sale sign as well as the homes status in the MLS would have been changed to pending…your real estate professional should have knowledge of this!
3. Ask for a copy of the sellers disclosure statement
This will also shine a pretty bright light on how you proceed with your offer. Be very attentive to this form and the sellers response to the questions. Talk to your real estate professional about any questions or concerns you may have!
4. Have there been any price adjustments?
Your agent or broker can get this information for you very easily so no need to ask the seller. That said, look for any consistencies in the adjustments, if there have been multiple price drops, it’s likely the house started too high and now the sellers are chasing the market! A great opportunity to help them with their next adjustment with your offer!
5. Are there any concessions (on your part) the sellers would take in to consideration for a less that full price offer?
Perhaps the sellers would like a long close for some reason? Perhaps a quick close (if possible) would get their attention? Maybe going in with an inspector to give the house a once-over so you can waive your inspection contingency?
Making your offer without offending the seller
Of course if the market allows you to take your time and present the seller with an offer that is below asking price, don’t add insult to injury. In other words, give yourself a good chance at getting your less than full price offer accepted! So, how do you do that?
- Make sure your down payment is healthy enough to get the sellers attention.
- Make your Earnest Money equally noticeable
- Keep your contingency timelines nice and tight…you don’t need 2 weeks to conduct an inspection or 6 weeks to get your financing in order.
- Make sure you have a solid pre-approval letter
- Most importantly, respect that the sellers are likely under some stress with the fact their beloved house is not selling. Offer a cover letter that speaks to how much you love the house and are looking forward to treating it with the same love and attention they have!
Taking the extra steps and care to give the sellers the peace of mind that they are going to finally sell their house…and to someone who loves it as much as they did will certainly go a very long way to getting your offer accepted…even if it’s not at full price!