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One of my favorite things about being a real estate broker/agent is helping my buyer clients to negotiate the best deal on the home they have chosen. Having represented hundreds of buyers over my 13-year career, I've found that each situation is unique, and that's part of what I enjoy. The mental challenge makes it....fun? That may be too strong a word to describe it, but the strategy part is intriguing to me.
I have a bit of advice that I wanted to share with home buyers with regard to making offers:
Yes, it really is possible to offend someone so badly that they won't sell to you. No, it's not common.
If you make an offer that's below the asking price and it gets accepted, don't start second-guessing yourself and wondering if you could have offered less. Many times, it's possible to hit the sellers' sweet spot, meaning the number they had in mind in the first place.
If you make an offer that is well below the price suggested by your Realtor, don't be surprised if you get a firm counteroffer, or even a counteroffer of full price. This doesn't mean that they don't want to sell. It means, "Please get serious and try again."
Just because a home has been on the market a long time doesn't mean that the seller will reduce the price a lot. They may be unable to do so, and that is reflected in the days on market. Truthfully, that home could end up as a short sale later, but you might be wasting your time to pursue it now.
If a home has been sharply reduced, this also doesn't mean that you will be able to steal the house. They may be bottomed out and near the price that they can reasonably accept.
If a property has been on the market for less than one week, the chances of negotiating the seller down very much are slim indeed. Why would they want to come off of the price so quickly? If you were in their shoes, would you?
While we're at it, I also have a bit of perspective to share with buyer's agents:
Don't be afraid to write up an offer well below the asking price, as long as it seems halfway reasonable. You might be surprised by the reaction. Then again, don't be shocked to get a pseudo-offended response, followed by a solid (meaning viable) counteroffer. Some listing agents like to act upset on behalf of their clients, THEN they present the offer.
Tell your clients the truth as you see it. If you think a home will go at or above the asking price, tell them so.
As I see it (and it's just an opinion, mind you), your job is to help your clients get the home they really want/need at the best price possible. This doesn't mean you have to squeeze every dime out of the transaction when negotiating, as long as it's a solid purchase/investment.
You probably won't win any big points with a listing agent by sending over a CMA or other justification for your price. Just tell them that this is what your clients were comfortable paying, and leave it at that. If you can say it honestly, you have leverage. There's no need to be pushy.
If you have to chip in a little bit of your own commission to make the deal work, do it, but only do it if you have no choice. I once gave up $3,000 toward repairs after we hit a stalemate. My commission check on that sale was $84,000. "No brainer" for me, right? Think about your priorities and don't let your pride get in the way.
While I don't think being overly prideful is the way to build your business, you CAN gently remind your clients of the work you have done for them (e.g. "I think this was a productive day of showings." or "I think that technique/idea I had worked well, and I'm happy to see the deal you got on this place.").
Whether you are in the real estate business or not, I hope you found this to be helpful. I don't mind sharing what has worked for me. Feel free to share your own ideas below.
Gettysburg Gerry is a Social Media Astronaut in the Gettysburg Adams County Pa area, exploring the limitless expanse of the Social Media Universe. He is owner and Principal for the firm Studmuffin Media. Gettysburg Gerry promotes all things Gettysburg, just google Gettysburg Gerry for more info.
Blog site for Studmuffin Media in Gettysburg Pa. Services include Social media managment, community building, content management, SEO, blogging, video, photography, graphic design, website evaluation and builds. We cover any and all aspects of the Social media, marketing world..
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.