1. Learn how motivated the seller is to make a deal
Certain sellers are going to be more willing than others to negotiate a low offer, and there are several giveaways that might indicate more leeway on the issue of price.
For instance, if the sellers have already purchased another home and that sale has closed, they're likely to be more willing to make a deal, said Dick Gaylord, president elect of the National Association of Realtors and a broker with Re/Max Real Estate Specialists based in Long Beach, Calif. And certainly if the property has been on the market for a long time, sellers will be interested in entertaining any offers, he added.
To get at as many seller details as possible, Gaylord gets in the ear of his or her listing agent. The nuggets of information he gets can be clues as to what kind of offers they'll consider.
Overall local market conditions also play a role. The housing market in which O'Heron bought, for example, was sluggish, and the home he bought had been on the market for about a year. Because of the job relocation, the seller needed to move and wasn't in the position to take the home off the market until conditions were more favorable, O'Heron said.
2. Make your case with hard facts
When putting together an aggressive offer for a client, Boyd doesn't just hand the seller a purchase agreement with the price the buyer is willing to pay - he creates a cover letter explaining exactly where that number came from.
In addition to citing comparable sales in making the offer, it also could be important to include details regarding the amount of inventory in the immediate surrounding area, he said.
"If we just looked at the relative values of the houses that sold, we would end up paying too much for that house because we know that the values are going to fall," he said. "If we see two years' worth of inventory, we should be buying five percent, potentially 10 percent less than what houses have sold for in the past year in the neighborhood."
Buyers may even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd, Gaylord said. That way, they can detail what they like about the house but express their fear of future dropping values.
That's still not to say the seller will respond positively.
"The difficulty we're having in my market right now... sale prices are not dropping, things are staying on the market longer," Gaylord said. "Buyers read about how terrible the market is; sellers don't want to budge because they're reading that prices aren't falling."
3. Prepare for the possibility of rejection, or negotiation
Ultimately, a real-estate agent working on behalf of a buyer needs to honor and facilitate the offer that the buyer wishes to make - even if it seems to be too low.
Gaylord offers a word of warning to buyers making very low offers, pointing out that the seller might refuse to negotiate. On a "super aggressive offer," Boyd might tell a client "there's a one in five chance there will be a positive response."
Still, there's that potential for a seller to counter-offer, especially if there hasn't been many other bids. Danielle Kennedy, a real-estate sales coach and author based in Pacific Palisades, Calif., advises sellers not to think of a low offer as an insult but as "a sign of interest."
"And it begins the dialogue regarding the purchase of your house," she said in an e-mail interview. "They should make every effort to be grateful that an offer has come in."
Sometimes after time elapses, the seller comes around and decides to negotiate, Boyd said. Or new information - such as the sale of a comparable home at a lower price - can nudge a seller to give an aggressive offer a second look and open the negotiation process.
Source: RIS MEDIA
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