Most buyers think that price is a sellers only consideration. The fact of the matter is that this couldn’t be further from the truth.
We are going to breakdown the items that may or may not influence if your offer is accepted. Let’s have at it.
Earnest Money – Also known as the good faith deposit. This money demonstrates to the seller that you are serious and have the financial wherewithall to complete the transaction. Where is does this go? That’s the question I always here. The good faith is held by the listing agent’s brokerage and will be applied to the listing agents commission bill aka part of the seller’s closing costs. The buyer receives credit for this amount towards the cash needed quoted by the loan officer for the buyer. In essence the easy way to look at it is it’s part of your down payment.
Down Payment - With the foreclosure crisis we’ve been experiencing the last few years banks have all but eliminated any “no money down” loans. Although still around for special circumstances, most buyers in todays market are going to need down payment monies. The more you are able to put down the stronger your offer will appear to the seller. In reality this is not a category a seller should really be concerned about as if you are able to close the loan how much you contribute shouldn’t matter, unfortunately it does. So the more down the stronger the offer looks.
Method of Financing - Paragraph 6-A of the CRMLS Standard Purchas and Sale of Real Estate agreement contains what type of loan a buyer will be securing. Again if the buyer has the ability to close the loan the type of financing they get shouldn’t matter but some sellers do consider it. Paragraph 6-B contains the information regarding any seller concessions. Less is better here because you’re asking the seller to give back some of their proceeds thereby reducing their net on the sale of their home. Sometimes this is necessary for the buyer to complete the transaction, in that case this can’t be avoided.
Closing Date – Most sellers are going to want you to close as quick as possible. The rare occasion will be if the place that they are going is not ready for occupancy yet. Offer the earliest possible closing date and that will strengthen your offer.
Buyer’s Contingencies – Any offer that has an “I must sell my house first” contingency attached to it will be appreciated because it’s an offer. However the seller most likely will want to keep their home on the market and give you a 48 hour contingency. What that means is if they receive another offer they will give you 48 hours to get your house under contract and if not they will go with the other offer.
Buyer’s Motivation – Is this buyer an investor or a home owner. Some seller’s only want to deal with homeowner’s for sentimental reasons and financial reasons. They can usually get more for their home from an owner occupant than from an investor.
Seller’s Motivation – Occasionally a good buyer’s agent can sniff out what the seller’s real motivation for selling is and then assist you with sculpting an offer around that motivation.
Market Trends – Is it a buyer’s market? Is it a seller’s market? Are foreclosures a plenty? Is a builder nearby offering discounts, add on’s or rebates? Are you looking in a neighborhood where the amenities offset some of the poor market conditions found elsewhere? Local market conditions can play an important role in the psyche of both the buyer and seller. Don’t assume that the market is bad just because you read an article on the web or something on the local news. The fact is that each micro market (neighborhoods) have their own markets. In each of these markets are price ranges that rarely look alike. Make sure you have an agent that can analyze the market trends.
The art of negotiations – The best negotiator I know is my 8 year old daughter. The 1st rule of negotiations is to ask the other side what would make them happy. Then always ask for more than you’re willing to do to give the seller something to ask for back to make them feel like they won. When each side walks away feeling like they won it is a true win win deal.
Hope this helps.
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