So you've found a great home in Mission Viejo and are ready to write an offer. The home is the right size, right neighborhood and within your budget.....great. Now comes the moment of truth, you hold your breath and out comes a number.
The offer price.
This is where the experience of your Mission Viejo Buyer's agent comes into play, if you listen. What to offer is a very tricky business. The first thing you need to know is what is the home worth....based on comparable listings. This is very important because the last thing you want to do is over pay....just because the home is listed at "X" doesn't mean the home is worth "X."
But once you establish that the home is in the ballpark of value, you still have to decide on a strategy. No buyer wants to leave money on the table...but neither do the sellers. The goal is to offer a price which is low enough for the buyer and high enough for the seller.
The first thing I do when I'm working as a buyer's agent on an offer, is to start thinking like the listing agent. Buyers and seller are emotional about real estate. This is not only a huge purchase, but usually it's their home. The agents need to stay compassionate while thinking analytically. The agents know the comps, the days on the market, the price drops (or lack there of) and the neighborhood statistics...are there a lot of short sales or foreclosures, what other factors might affect value.
There is a misconception that the buyer can start as low as they want, and then with some counter offers they will meet in the middle.
Nothing could be further from the truth!!!
Buyers think they are smarter than the buyer of 10 years ago....the sellers think they are also. Both sides want to believe that they know where the home should be priced, and what is considered a good deal. When advising my buyers on an offer price, I try to get them to write a solid offer which makes it easy for the seller to say "yes" to it....not to think of this as a game. An offer which is written way too low only invites more negotiations and often results in one side giving up before we reach an agreement. But a well thought-out offer with reasonable reasons for the price....even if it's an aggressively low offer....is more likely to be received with a spirit of "let's work this out" rather than, "forget it."
That's the point.
The ironic result is that usually, I see better acceptance prices by using this strategy. Two different examples in the past few months show this.
Buyer 1: Wrote a $550,000 offer on a home listed at $620,000. Real value was about $595-605,000. Seller refused to counter....no deal.
Buyer 2: Wrote an offer of $703,000 on a home listed at $719,000. Real value was about $710,000. Seller took offer as it was written, didn't want to take a chance of losing the buyer.
In the second case, we wrote a good offer which the other side was afraid of losing...we made it easy for them to take it, even at a little less than value. Buyer 1 would have paid over $600,000 but wanted to "see how low they would go." They could not believe that they didn't get a counter. I tried to talk to the listing agent, but he said that the seller really felt this was not a serious buyer and/or a user who would make things tough during escrow....they didn't want to deal with it.
I had very disappointed buyers, but there was nothing we could do at that point. They "tested the waters" right into no house.
The Mission Viejo Real Estate market is strange right now....no question. But it's not just the buyers who have more information these days, it's also the sellers. I find more and more sellers tired of the "buyer's market" drum beating and are pushing back. If it's a home you want, think more like the sellers and you will go a lot further in price negotiations...and probably get a good deal in the process.
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