MAKING AN OFFER

When I work with Buyers and Investors my objective is essentially the same.  I want to be able to send a Seller the lowest possible offer that will get them to think things over and respond.  Resisting the urge to send in a low ball offer is a hard thing to do (we've all done it at some point).  Having said that, just as some Sellers may think your offer is unreasonable there are just as many Sellers out there asking an unreasonable price.  Here are a few tips for coming up with a good offer:

1) Do your Research

In order to effectively negotiate you need to know what the property is actually worth.  Ask your Agent to do a detailed analysis of the homes that have SOLD in the neighborhood in the past 6 months.  Ask them to go through the same steps they would go through if they were trying to get the listing. 

Look at the difference between the Asking Price and the Selling Price of homes in that area and price range.  This should give you an indication of how much Sellers are coming off of their price to make a deal.  If the Average is 7% off of Asking Price I would suggest finding the Market Value for the home and beginning at 7-10% less than that value (as a general rule).

2) Be Friendly But Do Not Be Their Friend

A great quote from a fellow Agent that I've always taken to heart.  As your Agent it is my job to get as much information from the other party as possible.  I am going to ask the Listing Agent things like:

• "Why are they selling in this difficult market?" 
• "Have you had any previous offers that were rejected?"
• "Do they owe substantially less than the asking price?  We don't want to run into a Short Sale situation..."  - GREAT QUESTION.  You should be able to find out how much negotiating room they have without directly asking "How much do they owe?" - No Listing Agent should ever tell a Buyer's Agent that but I get that question answered successfully almost 100% of the time.
• "My Client is ready to make an offer right now but they are not in a rush to get into a new home.  Are your Clients wiling to work with us and give us a deal if we make you an offer right now?"

3) Don't Play Hard Ball to the Point Where You Ruin the Sale

If you've gotten the price and terms you're looking for and you're happy with the "price" of the investment don't get caught up over silly things like a TV, couch, Home Warranty, etc.  When I work with Buyers and Sellers, I tell them that if we can get within 1% of the Asking Price and Offered Amount there should be no reason why a deal can't be made.  I'm not here to tell you that it's impossible to get everything you want.  I'm here to tell you that there are things that are more important than others (such as closing costs, price, closing date, inspection period, appraisal, etc.).

Look out for my next installment soon which will deal with the potential pitfalls from the time the offer is accepted until the time the deal closes and you are handed the keys.

Brian Beatty
Foreclosure/REO/Short Sale Expert
2006 Entrepreneur of the Year
Weichert, Realtors Palmetto Coast
(843) 345-1273
LowCountryHomeSales@gmail.com

WWW.LISTINGSINCHARLESTON.COM

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