So many times I have seen eager buyers find a home that they love but instead of making an offer right away, they want to see if they can find something better. After they are satisfied with their search efforts and decide to go back to the previous home that they fell in love with at the first time, they are in for an unfortunate shock. The property already has an accepted offer.
Can you still win the property? Sure! But now you no longer have the upper hand in negotiations and you may end up paying more than what you had expected to pay before.
Of course, you could end up losing the chance all together if the property is in contract.
See, lots of buyers have this mentality that they will be missing something if they make that offer. Lots of buyers feel that they may be jumping too soon on something they like and feel that they should wait it out a bit. It’s a natural thought really, so don’t feel bad. You are investing in something that’s not a thousand dollars but something that is either hundreds of thousands of dollars or more.
The problem with waiting is that you may end up losing the home that works for you and your family by hesitating.
So, I always advise buyers to MAKE THAT OFFER!
Here in New York City, when you make an offer, it’s not a contract! It’s not binding, you can make offers on other properties, so you don’t have to fear on losing out on anything. I actually feel that people who are home shopping should make multiple offers on multiple properties that 1) Works for their families 2) Is something that they love or can love with some renovations 3) And works for their pocketbooks.
You should also note that, almost all homes are negotiable! Just make that offer! If the property is $500,000 and the top of your budget is $450,000, go ahead and make that offer of $435,000. You never know what the seller’s motivations are or their needs. If the property has been on the market for a while, you don’t know if they will take your lower offer. Maybe your offer is the only offer they have had, EVER! Maybe they have to leave the state right away for a new job. Maybe they need to disappear out of the country for a while due to some illegal activities. Maybe they are going through a divorce. Maybe they just want to be done with the property. You just never know.
You should only pay what you can afford to pay and what you are willing to pay as well as keep the market value in mind and being respectful to the seller.
Don’t just give an offer if you aren’t seriously considering to purchase the home. Don’t be rude or obnoxious to the seller if you are dealing directly with them. You want them to take you seriously, even if your offer is lower than the purchase price and by being respectful to the market, it will keep you from giving an offer price too far below the market value. Sure, you can always offer less than the listing price however, you should keep in mind to not go too low on the offer. For example, if you see a property for $500,000 and the houses similar to this property in the area has sold for around $465,000 to $520,000, don’t go in there trying to offer $350,000 (unless it is a foreclosure home that needs a total gut renovation and at that point, it wouldn’t be priced at $500,000 honestly). Usually, sellers won’t even counter or entertain a really low offer at all and would cut all communications with the person making that offer.
If you are dealing directly with the seller of a property, you can always say something like “I love the place, I think its in a really great location and it’s a great home (substitute property type here if you want). I know this offer is a bit lower than what you are asking but I am really serious about moving forward. I have a mortgage pre-approval and an attorney ready to go. I’d like to offer to purchase the home at x, y and z.”
If you are working with a realtor, your agent will be doing all of this for you as well as educating you on the market value of the area you are interested in. I hope that you have found this useful. Please feel free to share with someone you know who is planning on buying a home.