FAQ: What do You Think the Sellers will Accept as a Fair Offer?
There's no template for choosing the right price when making an Offer. As a rule of thumb, 5% off the list price won't typically ruffle any feathers…unless you’re in an incredibly hot sellers’ market. Many buyers have read or been told by family or friends to Offer 90% - 95% - 97% of list price - that's a fatal mistake and will not get you the keys to your new castle!
There are several things to take into consideration when crafting an Offer and establishing a fair Offer price:
- How long has the property been on the market? - If the property has been sitting on the market for months, a lower Offer is certainly not taken as an insult to most sellers. You never know how low a seller is willing to go.
- Are the sellers relocating? - If the sellers are being transferred and eager to move, you could absolutely have some wiggle room with negotiations.
- If the property was just listed and it is a strong sellers’ market, don’t even think about going in low on days 1-5. If you’re drawn to the property, with our low inventory market, rest assured, someone else is too! Go in strong and clean - no discounts, no contingencies!
Consider the condition of the property. - If it’s in pristine condition, you may get away with offering a bit less than list price in a hot market and waive your repair contingencies. Of course, you’ll still want to have inspections but, the seller knowing that you’re likely not coming back to negotiate later, may very well sway them to accept a lower price.- What do you know about the sellers? - Has as your agent found out that the sellers are under Contract on another property, just waiting for this home to sell? If so, they may be a bit more motivated to accept a lower Offer - a lower Offer, not a low-ball Offer!
- What do the recent comparable sales tell you? Let your agent be your guide with a CMA (Competitive Market Analysis) that reflects the ‘true’ value of the property. Bear in mind, market value is what a buyer is willing to pay. What are you willing to pay?
- Do you have any contingencies? If you have a home to sell (that is already under Contract), chances are, if the sellers are willing to accept your contingencies, they will expect a higher sales price.
- Do you expect the sellers to pay some Closing costs for you? If so, in a hot market, you’ll likely need to raise the price to reflect the request for Closing costs. But, be careful with that - you don’t want to run into appraisal issues down the road…and ultimately have the seller remove those Closing costs from the Contract.
- How long have the sellers lived in the home? If they are the original owners or lived in the home for quite sometime, done major renovations to the home and/or lovingly cared for the property, this is an opportunity to appeal to their emotions. Let them know (by way or your agent or a nice letter), that you can TELL that they’ve lovingly cared for the home - and that you will as well.
In a nutshell...
Once you find THE perfect home for you, things start to get real—and real fast. Making the right Offer that will ultimately be the one that will end the negotiations with you holding the keys to your new home, is very REAL!
Offering substantially below list price in today’s market is likely going to be wasting your time - and everyone else's! If the property has been sitting unsold for a month or longer, even the sellers probably don't expect full price. Look at the facts - the comparable properties that have sold recently don’t lie. Hopefully the sellers are looking at the same comparables you are as well!
Price & contingencies BOTH matter to sellers. When at all possible, consider dropping some of the contingencies. If the market is hot and you expect to get the property for a little below list price, remove all possible contingencies, including the addition of seller-paid Closing costs.
Negotiating is what I do best! When you’re ready to make an Offer, rest assured, I will guide you every step of the way to help you win the home of your dreams - if you follow my lead! Call me at (704) 491-3310 if you’re looking for a Charlotte Realtor® to help you buy and negotiate a home in our area. Let’s talk!
Hiring the RIGHT Charlotte Realtor® is critical to your home selling AND home buying success!
© Debe Maxwell | The Maxwell House Group | CharlotteBroker@icloud.com | FAQ: What do You Think the Sellers will Accept as a Fair Offer?
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