How Not to Make An Offer In Today’s Market
The market is surely not what is used to be despite Austin’s general resilience to national economic turbulence. Buyers are out for amazing deals and expecting sellers to give the world. A deal requires a happy medium from both buyer & seller.
The Anatomy of a Healthy Real Estate Transaction
- 2 parties who are both getting what they need
- 2 parties who can understand what the other is going through
- realistic initial offer price & terms
- reasonable earnest money
- reasonable time frames for both parties
Step 1: Do you want this house or the best deal?
Why are you in the market? Are you looking for the right house or the best deal? I’m finding that those looking for only the best deal are coming up short in the end. They’ve waited for the bottom of the market which is long gone, they’ve waited for rates to take yet another dive which they won’t, and now they’re left empty-handed.
• Don’t wait for something that isn’t there. Don’t forget to look for a quality home that fits your needs even if it’s not the cheapest one out there.
• Do get off the fence now if you are looking to move, but think about what you really want in a house and look for the best home for you, not the best deal on paper.
Step 2: You’ve found the house, but do you really want the best price?
Because barging in on an already stressed seller with a low offer puts them on the defense.
Make sure that your offer is based on good SOLD comparisons and be realistic. Just being nice to a seller in a sea of negativity will get you a long way. A defensive seller will come back with a higher counter-offer than a friendly one. Your seller needs a reasonable price sell as well as reasonable terms (earnest money, perhaps a lease-back). Threat your offer as a give & take; find out what is important to the seller based on their situation and find the medium with your needs.
Don’t base your offer on overpriced homes that haven’t sold, what the seller is making on the deal, what the seller’s loan amount is, or anything other than reasonable facts about the market and the property.
Do put yourself in your seller’s shoes & make a reasonable offer. Who would you give a better deal to, a friend or a bully? Be realistic, sellers are a potential partner to your transaction, not your enemy.
Step 3: Keep it together, or else!
Inspections can be the death of healthy transactions. These days so can loans. Keep up with the progress of repairs as well as your loan. Excitement is natural, but keep it under check and out of your transaction. Use your agent as your negotiator and make sure yours can keep a level head. Again, be sure to put yourself in the seller’s shoes. How would you really feel if a buyer asked for that? How would you really feel if your loan delayed their sale (and in effect, your seller’s new purchase).
Don’t panic! Calm heads find the best solutions and a creative idea may be needed.
Do prioritize safety issues rather than cosmetic ones for repairs and keep in mind the age of the home. Make sure your lender is on track, they are likely overworked with refinances and tax incentive transactions.
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