Buyers: If you Want the House, Let the Offer Show It!

Buyers:  If you Want the House, Let the Offer Show It!

In any market, buyers run the risk of offending a seller with a potentially lower than expected offer.  There is a time and place for negotiating that way, but purposely offering much less than what comparable properties are selling is always a risk.  As a buyer, you do not know the motivation for the seller. 

When a seller is presented with your offer, they have 3 choices:  

1.  They can accept it exactly as written with no changes.

2.  They can reject the offer.

3.  They can send the buyer a counter offer for the items that were not quite what they wanted.

Does your offer show that you want the house?  In my experience, a buyer that offers within the average list to sale price ratio (In Cedar Rapids, this is 97-98%), shows that they want the house and expect the seller to negotiate to the middle.  But it depends on the seller.

Some of the factors to consider if you are a buyer wanting to offer considerably less than the asking price:

1.  How long has the property been on the market?

2.  Has there been a recent price reduction?

3.  Is the seller offering a quick possession, home warranty, or allowance for painting or flooring?

These are all symptoms of possibly a stale listing if the property has been on the market for longer than 45 days in our Cedar Rapids market.  Sometimes, the price was unrealistic at the start.  Sometimes, it was timing or how much competition there was in the price range.  And sometimes, it makes no sense why one home sells and another doesn't.  Do not be afraid of a home that seems perfect for you that has been on the market for what seems like a long time.  There may be absolutely nothing wrong with it!

If a buyer chooses to offer a much lower than expected offer due to the condition of the property or the length of time that it has been for sale, consider writing a list of the reasons that you feel that your price for the home is valid. You can also ask your buyer's agent provide recent market data showing that your offer should be considered.

There are ways to get a home for less than the asking price, but listening to HGTV might not be the best idea if:

1.  There is a currently a seller's market (meaning that there is not much inventory and high demand) in the neighborhood and price point that you are considering.

2.  If the home has only been on the market for a couple of days and you see many buyers milling around at the open house.

3.  If the home has lots of upgrades and shows much better than any other home that you have seen so far.  

These are all indicators that the home is priced correctly, drawing in the most interested buyers and is likely to ellicit a quick sale, maybe even with multiple offers.  If you are competing with other buyers, you will not want to risk offending the seller with your less than appealing offer.  You want your offer to show that you want the house.

If you would like to know the best way to start your home search, or if you are thinking about waiting until the spring, contact me today!  I will create a webpage for you to view all of the available properties in your criteria and price range.  That way, you can watch the market and see how quickly or slowing the houses in your area are selling so that you can properly prepare for the spring market.  There will be more properties to look at in the spring, but there will be more buyers too.  Don't miss out!  Contact me today at 319-521-0701 to set your search for success!

Keep smiling!

Karen