Dear buyer who is tempted to "low ball" an offer:
Let's talk about making a winning offer. If a "win" is getting a bargain, we may be looking a long time in the current sellers' market. If a "win" is getting the house you really want, we need to be realistic about what sellers expect during a sellers' market. It's pretty unlikely that you can squeeze an owner in the current market. Consider (or maybe reconsider) the following questions:
- Have you already lost a home that was perfect for you
- Do all decision makers have an equal desire to purchase a home at this time...or is somebody sabotaging the process, either consciously or subconsciously (when more than one person is making the decision)
- How long before you need to be in a new home
- When does your lender's pre-approval letter expire
- Do you have a locked interest rate
- Are you betting that interest rates will remain stable, instead of rising
- Have you settled on your Must Have list and Must Not Have list
- Are there factors that you have not shared with me
- Are you offering on homes that truly suit your needs
- What, if anything, has changed since you started looking for your next home
It is a sellers' market right now, and the reality is that your first offer may sometimes be the only chance you get on a particular home. In fact, someone else is probably making a good offer right now for one or more of the homes you have considered. Before we move on to look at homes, we need to pause for a moment of clarity. I don't want you to miss out on your dream home.
Every seller who has listed a home has already given a clear signal about what terms they consider reasonable. The seller owns the home 100% and, thereby, controls the sale of that home 100% right up until s/he signs a contract with a buyer. Of course, you can offer substantially less, but the owner still drives the deal—especially in a sellers' market.
Here is another fact you may not have considered. No Realtor® gets paid a penny until s/he sells something. While I realize you may think that is not your problem, buyers' agents and listing agents both need to be working with people who are actually going to buy. Though I may be willing to "test the water" for you, on the other side of the deal is a listing agent who may be encouraging the seller to treat all lowball offers as being unworthy of meaningful negotiation.
One of three things usually happens to a lowball offer: 1) Seller counters back at full or near-to-full listed price; 2) Seller delays response while waiting for a better offer; 3) Seller is insulted and rejects offer completely or lets it expire without an answer. All three scenarios delay your buying process and give other buyers the chance to swoop in and snatch up the home.
Having an offer in the mix does not give you special priority, and it does not lock out other buyers. Sellers do not have to respond to offers sequentially. In fact, a seller can completely ignore any offer. A seller can also withdraw a counter offer to you RIGHT UP UNTIL you have accepted, signed, and had your agent deliver it to the seller. The seller can STOP negotiating with you and sign with a different would-be buyer. Remember that all three things have to happen (accepted, signed, delivered) before your deal is final. In most states, texts, conversations, and email do not constitute legal acceptance; and they certainly do not fulfill the signed requirement required in real estate transactions.
On the other hand, a phone call, text, or email from the seller's agent can cancel a negotiation that is underway right up until the contract has been signed by all parties. When I am representing a seller who wants to cancel an on-going negotiation, I usually fire off all three types of communication nearly simultaneously, though all three are not required. I can type the email and maybe even hit SEND while I am waiting for the other agent to answer the phone call. "Seller rejects buyer's offer on 123 Main" is a very fast email or text, just to get it in writing. At that point, the still-negotiating buyer is locked out of the deal...without further a-do, it's adieu.
One fact remains above all others: For a buyer who is ready, willing, and able to purchase, a "win" is getting under contract! Are you ready to be a WINNER?
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