Keys to Putting in a Winning Offer
Navigating the real estate market today can be very challenging, particularly when negotiating a contract for a successful home purchase. With the effects of Covid-19 still lingering in our communities, it is currently a “seller’s market”; i.e. there are more buyers than sellers. This disparity creates a negotiation bias for the sellers, who are more likely to get what they want out of the deal in selling their home. However, as a buyer, that does not mean that you can’t negotiate a good deal on your prospective home! It simply means that you might be in need of some key negotiation tips to better position yourself in the process. Knowledge is, after all, power.
I’ve found the following negotiation points to be key: the price and the terms. Specific pricing strategies are very important, but the terms are the other pieces to the puzzle. Terms can refer to the inspection time period, repair requests, appraisals, financing options, and the time period to close.
Price seems to be a pretty blatant key to negotiation. The higher the offer price, the better chance for the seller to accept. I have also found that the terms of the contract are often undersold (pun intended). In today’s market, many sellers will take a lower price that’s not contingent on the appraised value or repairs over a higher offer that is contingent. I often advise buyers to take a really hard look at the home to decide if repairs could be a deal-breaker. Of course, we still want complete an inspection to confirm that there are no major issues. However, if you can choose to forego extra repairs and not lower the price due to the appraisal, the seller will be more motivated by your offer. When you put offer price and negotiated terms together you can transform your contract to a deal-changer for the seller.
We hope that these tips can help you as you are negotiating a contract in the Real Estate Market.