Make Your Offer the One They Take

Developing a Winning Offer

Some factors to consider in setting an offer price are:The listing price of the property. Do your own competitive market analysis to determine if the listing price is reasonable.
The real estate market. Determine recent trends in the sale price vs. listing price of properties to determine the market’s strength.
The condition of the property. Estimate the cost to repair deferred maintenance on the property and to replace major components that are near the end of their useful lives. These costs should be deducted from the offer price if the seller is not going to remedy defects before closing.

TIP: For a quick reference list of how long different home components and major appliances last and how much they cost to replace, local vendors or manufacturers’ Web sites are good sources of information.

Ways to Have Your Offer Come Out on Top

Get your Realtor to analyze the comparables with you before formulating your offer. Your Realtor will explain to the sellers during the negotiation why seemingly similar neighborhoods have different average prices and which homes are true comparables.

Assess the strength of the market.Strengthen your negotiating position by knowing which markets are active, which are overbuilt, and which are taking off.

Ask your agent to find out what the seller expects from the transaction—a quick closing, a top-dollar offer, and a big downpayment. Then tailor your offer to those needs.

Determine what's included in the price. Who will pay for repairs, closing costs, commissions? What fixtures will be sold with the house?

Work with your agent to get the paperwork in order. Be sure the offer is typed, clearly presented, and includes all necessary addenda, buyer qualification information, and signatures. A cover letter from you humanizes the offer.

Talk with your agent about what she/he thinks is the best way to present the offer. Salespeople disagree as to whether offers should be presented in person or electronically. Some like the personal touch, while others prefer to keep things at arm's length.

TIP: Many people find it harder to reject a fact-to-face offer. Personal encounters also allow you to work out areas of contention more quickly.Buyer's Checklist

The following items are typically contained in a purchase contract (but study each contract carefully for variations before signing):

Personal property to be included or excluded from the sale
Who pays for required repairs or retrofits
The buyers’ inspection rights
The sellers’ disclosure obligations
The sellers’ obligation to maintain the property
What the seller warrants about the property
What happens if either party doesn’t comply with the contract
What date the sellers will vacate and contingencies for noncompliance

5 Things to Know Before You Negotiate

1. What is the highest price you are willing to pay?

2. What negotiating points will you give in on and what is each worth?

3. Are you prepared to walk away from the deal?

4. What contingencies must you have as part of the deal?

5. What impact does time play for either you or the sellers?