I think everyone knows this is a Seller’s market. There is less inventory then there is demand. Many Sellers are pushing up the asking price of their home trying to glean a few more dollars. This is understandable. Some Sellers have gotten TOO aggressive with their asking price and are “out of the market” This I believe is an opportunity for Buyers who want to avoid the bidding wars that occur today. There is no rule that says you can’t offer $200,000 for a home priced at $225,000. As an agent, I have a fiduciary responsibility to present any offer you make. I frequently provide input as to the probability of an offer being accepted. My Dad used to tell me the answer is always NO until you ask.
I have heard agents say, “I won’t present low ball offers” While that statement may make great “water cooler chatter”, it is not consistent with A Buyer Representation Agreement. Remember, your Agents job is to act in YOUR BEST INTEREST!
If you think a house is overpriced by $20,000 but you like the house, why not make an offer? What is the worst that could happen? The Seller could say NO THANK YOU! That’s not too devastating, is it? Sometimes the real art of negotiating is having a willingness to start the conversation. Oh and as far as hurting the Seller’s feelings, unless the Seller is your relative and you have to see them at every holiday for the rest of your life, it should be of little concern. This is a business transaction not an assessment of the Sellers taste in clothing or a critique of their peach cobbler recipe. If the house is in need of updates, has deferred maintenance or other issues it may be advisable to outline your reasons for the offer price.
Let’s, for a moment, think about a Seller who in an overheated real estate market (like we have today) has been on the market for over 90 days. And lets also suppose that they have had some showings but no offers. Is it possible they would welcome an offer even if it’s lower than the asking price? I would say in most cases the answer is YES!!! Remember, the actual market value of anything (including homes) is the price a willing Buyer and a willing Seller agree to.
This strategy can work if you and your agent are willing to do the homework.
What is the market value of comparable homes in the neighborhood?
Similar = style, age, finished sq. feet, amenities, finishes
Be ready to execute
Have a pre-approval letter
Sufficient earnest money
What are your contingencies
Sale of your home
The bottom line is you may be able to put yourself in a position to buy a home if you are willing to venture outside your
comfort zone and the proverbial box. Buying a home in today’s market can be difficult, but not impossible. You may just need to stretch a bit and be willing to look where others dare not go!!