We all know buying one of the few existing houses on the market is competitive and as our latest statistics reveal anything priced below $300,000 really has the seller in the driver’s seat. Understanding that and the fact your offer is likely to be one of several make sure your agent is asking the right questions to determine the seller’s motivation.
Just like your agreement with your buyer’s agent the seller’s agreement requires confidentiality. The right forms of questions may help uncover motivation even without the written permission of the seller. If your agent finds you will be in a multiple offer situation where your offer is presented with offers from other qualified buyers you need to make sure they are requesting the right kinds of information while protecting confidentiality.
Agents will often ask, “How motivated is the seller?” Of course they are looking to see if there is room to negotiate the price. It is unlikely most sellers will offer permission for their agent to broadcast they are willing to take a lower price. Anyone who has their home listed is obviously motivated to sell. What should concern you is whether or not there are other offers coming in. If so, you might want to offer slightly above the asking price to set yourself apart from the competition. A seller with property offered at $199,900 might be swayed by the one offer that is written at $200,000 so $100 could give you the competitive edge.
Some agents will suggest a compressed timeframe may motivate the seller. This should be verified with the seller’s agent as well as with your lender since either party will have their own thoughts about when is too soon. If the seller has no place to go, they may be reluctant to accept a cash offer that will close and transfer possession within a week. On the other hand, if a seller is prepared to leave but you are borrowing money, your lender may not be able to accommodate anything sooner than 45 days from the date of acceptance. Determining this ahead of time, “What timeframe is your client comfortable with as a closing date?” will help you craft an offer more likely to be accepted.
Realistic terms are also important. With interest rates on the move you want to make sure you illustrate reasonable expectations of the financing you may need to facilitate the purchase. Offering a conventional loan with a fixed interest rate that may have been available when you began your search may not be achievable in today’s borrowing climate. The agents representing both sides of the transaction should know what is reasonable. You will have to decide if you are willing to pay a higher rate should they go up during your loan approval process.
When competing with other offers, do not be afraid to make an emotional plea. Often a heartfelt letter to the seller telling them why you have chosen their home and what it will mean to you can make your offer the strongest. Your agent can ask the seller’s agent if their client has expressed what they would like to see happen with the home. You may want to talk about what a great home it would be to raise a family but avoid stating your plans to completely remodel and change the character of the home. On the other hand, the seller may have always wanted an addition or change you intend to do as well so they could be compelled to accept your offer to accomplish vicariously what they were unable to complete. Good communication between agents will make a big difference to both buyer and seller and lead to a smooth and agreeable transaction.
Trust an expert….call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate Broker and the spokesman for the Coeur d’Alene Association of Realtors. Kim and the Association invite your feedback and input for this column. You may contact them by writing to the Coeur d’Alene Association of Realtors, 409 W. Neider, Coeur d’Alene, ID 83815 or by calling 208-667-0664