Mistakes Buyers Make in a Sellers’ Market
As prices rise, sellers become more aggressive and buyers become more cautious. In this kind of market how do you make a competitive offer while not overpaying?
Here are some tips to get the edge in a negotiation.
- Get attention.
Go in with a strong offer showing that you want the property and that you have done your research on the area. Of course, you want the property for the best price possible, but in a strong market low offers asking for concessions are often rejected. The seller needs to know you are a serious buyer and won’t nickel and dime them to the end. Sellers want to accept the easiest offer.
- Be ready.
In my experience a good buyer is usually one watching a specific market area, they are the first people through the door or on the phone as soon as the sign goes up. These buyers are the ones who generally want the home more than anyone else and if they have lost out before will be the most wise and aggressive with pricing. A knowledable agent will help the buyer know the area, recent sales, upgrades and location and can and will use these factors in coming to an appropriate offer price.
Have your down payment and prequalification information ready to provide to seller. The best buyer is the one who can close. Buying isn’t about getting the deal, it is about closing. Seasoned selling agents want their sellers assured of closing as quickly as possible and will try to move up the contingency periods. You need to be ready to respond to these requests and the best answer if you can do it is, YES.
- Ready to close escrow.
Your job as a buyer is come off as experienced and knowledgeable and willing to close the deal. Meaning that your agent has already prepared you to get all your documents into your lender, prepared for the home inspection, and buyer requests for repairs in a timely manner so that closing will not be delayed or difficulty.
- Learn from your mistakes.
In this current real estate market it is going to be hard to get the first home you fall in love with unless you have done all of the above on an ongoing basis. Don’t let that discourage you. the right home is out there and you need to keep learning. Most buyers don’t believe their agents in the first few go rounds when they advise to offer a higher price, but sometimes that is necessary. You must find an agent you can trust to advise you, while remembering they are your fiduciary and must do as you request. So even if they advise you to go higher, if you tell them you are going in low, they must help you with your offer or advise you to seek another agent.
- Off market opportunities
A seasoned agent with contacts and relationships in the area has an edge in the market and with negotiations. Sometimes a good agent will have the heads up on an area before homes go to market. You may want to hire an agent who works a specific area and let them help you close the deal before the seller goes to market. As an example, this past year I have more off market closings, than on market closings and all my buyers and sellers remain my good friends.