Previously I discussed negotiating for real estate so that you could understand the basics of how to be successful making a deal with the vendor. I now want to delve a little deeper into the subject. A buyer needs to know the answer to this important question before making an offer. “Will there be competition for the home?”
In some cases it is always wise to assume you will have competition but many times, you may be the only one bidding for the home. Knowing if another buyer will be offering at the same time will help you decide what to offer. If it is not possible to know with certainty, seek to get a commitment from your agent that you will be informed should another offer on the property be presented to the vendor with yours. In this case, you would have a opportunity to revise your offer if you felt it was necessary.
If you have or are very likely to have competition, you will be negotiating from a position of relative weakness. Sellers who are given multiple offers on their home enjoy the good fortune of picking the best offer. When they know that multiple parties are interested they will be less inclined to reduce their expectations even if they really want to sell. Here you should remember that money talks. If your offer is the best they receive, you will likely be the successful bidder. At the least, you should receive a counter offer if the vendor’s motivation to sell has not wained.
Yet there are some circumstances when the highest offer is not necessarily the one preferred by the vendor. If the vendor has any hot buttons, it pays to know what they are. I once had the seller accept a lower priced offer because the purchaser was a self professed gardener. He believed this purchaser would appreciated and best preserve the work he had done making the garden into a veritable park. Who knew?
If your offer is rejected in favor of another, like most buyers you will find it disappointing. To have found a suitable home, made an offer for it, but then discover that the property is sold to a higher bidder can take the wind out of your sails. Unfortunately buying a good home may require quite a bit of effort so loosing it at the negotiating stage is unpleasant.
When you want to buy a specific home, there is usually only one home on the market like it. Buying a home is not like picking one of several suits of clothes off the rack. If you want a house, but you are not the only one offering for it, you will need to know your limit and make sure you express that in the offer. When you know there is competition, you will be better able to make correct decisions during the negotiating process.
R. Greg Osmond is a Platinum Award winning Realtor serving St. John’s and surrounding areas, Newfoundland and Labrador for over 20 years and can be reached at 709-895-2500. Visit http://www.rgregosmond.com/ for further information. Find him on facebook and be a friend.