We've identified the home of your dreams. The next step is to submit an offer that's acceptable to you and the seller and get the home under contract. In today's market, there's a high likelihood that you will be competing with other buyers for the same property. So how do you make sure that YOUR OFFER is the one that is ACCEPTED?
Here are some of the strategies I use to help you write an offer that gets you the home of your dreams!
1. Contact the other real estate agent to learn what the seller wants. Every seller, would like to receive a full-price offer for their home, but they understand that they will usually have to negotiate. Together, we need to determine the terms that will work so all parties involved achieve a win-win outcome.
2. Study the market for the neighborhood. I look at the market statistics for the area in which you want to buy. If homes are selling, for example, within 2-3 percent of the asking price, writing an offer for 10 percent less than that number probably won’t get the deal done. Be realistic and in line with the market when you offer. Make sure you include all of the recent comparable homes that have sold over the last few months with your offer. This provides the seller with objective information on how you've selected your offer amount.
3. Leverage your position. It’s important to work with the seller to make the deal go as smoothly as possible. For example, strengthen your offer with a larger escrow deposit if you're able. Select a closing date that works best for the other party. You need to cooperate on issues like this to make for a happy seller who accepts your offer.
4. Introduce yourself. If appropriate, write a letter to the seller describing how you feel about the seller's home and why you want to buy it. This will be presented with your offer. By using an emotional tactic, the seller will feel that their home is in good hands, which may give you an upper hand if you're competing with a similar offer.
5. Expect counter-offers. Very rarely will a seller accept your 1st offer unless it's for full asking price (and that's no guarantee). Do not get frustrated when the seller comes back with a counter. Decide what concessions you're willing to make and move forward with a counter that works for you.
6. Consider an Escalation Clause. If you're competing against other offers, you may want to consider an including an escalation clause with your offer. This lets the buyer say "I will pay x price for this home, but if the seller receives another offer that's higher than mine, I'm willing to increase my offer to y price". There are three basic components to this clause: 1). What is the original price of the offer? 2). How much will that price be escalated above any other competitive bid? 3). What is the maximum amount that the purchase price can reach in case of multiple offers? In some cases, the seller will not accept an offer with an escalation clause (commonly with bank-owned properties). Make sure you find out prior to submitting your offer. There are many other intricacies with an escalation clause, make sure you research and fully understand the components before including one in your offer.
Feel free to contact me to learn more about all of my negotiation strategies. I look forward to helping you with your home buying and selling needs in the Naples area.
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