Making Your Real Estate Dreams Come True

Posts tagged ‘negotiation’

Writing an Offer on a Home

Once you’ve found a home, your agent will help you write an offer.

An offer takes the form of a contract and specifies everything about the conveyance of the property. Then, your agent will present the offer to the listing agent who will present it to the owners.

How Much Should You Offer?

In writing an offer, some buyers are concerned about offering too much. They think that if their offer is accepted, that means they could have offered less and still gotten the house. Other buyers are concerned about making an offer that is too low. They’re afraid that the sellers will be insulted and will refuse to negotiate.

Our advice to you is to make an offer that reflects what the property is worth. The only way to find out what it’s worth is to compare it to other similar properties that have sold in the same neighborhood. Your Realtor will call that a Comparative Market Analysis (CMA). For more information on how CMAs are written, please read this article.yellow

What Other Information is in the Offer?

In addition to how much money you’re willing to offer for the home, there are other factorsthat are included in your offer and may impact the seller. One factor is the time frame. Your seller might want to close quickly or slowly to accommodate some event so your offer might be more appealing if you’re offering a flexible closing date. The type of financing you’re securing and the amount of your down payment are also important to your seller. They may feel more secure if your down payment is large or if your loan is a certain type.

You will also be asked to provide a check as earnest money. This is money, usually $1000, that indicates that you really intend to follow through with this contract as it is written if it is accepted by the seller. Of course, if the contract fails to be accepted, you will be refunded that money. If the sale gets to closing, this money will count as part of your down payment.

Then What?

Your agent will present the offer to the sellers. Possibly, they’ll have you write a letter telling the sellers a little about yourself to make the offer more personal. Additionally, your agent may present the offer in person to negotiate on the spot, with your permission.

The seller will either accept the offer as written, make a counter offer, or simply say no. If they accept the offer as written, congratulations! You’re on your way to owning the home you’ve chosen! If they make a counter offer, then your agent will negotiate on your behalf to try to reach a meeting of the minds. If they say no, then you’re back to the drawing board.


“Let’s just price our home a little higher to leave room for negotiation…..”

“Let’s just price it a little bit higher so there’s room for negotiation,” Mrs. Homeowner said.

“You never know!” Mr. Homeowner agreed.

Mrs. Homeowner nodded. “We can always lower the price later!” 

When I invest my time and my money into marketing a home, I want it to sell. Simply put, I don’t get paid until the keys exchange hands. While the strategy Mr. and Mrs. Homeowner wanted to use is common, it’s also a result of being grossly uninformed.

If you overprice your home, there will be no one to negotiate with. Buyers are educated – they can see, with the click of a mouse, all of the homes available in a neighborhood in their price range. And if your home isn’t at least average in that pile, they won’t even bother to come see it. So if you price your home a little high – even 2 or 3% higher than market value – no one will come to see it and therefore you won’t have any buyers to negotiate with. Homes listed for $500,000 attracts buyers who want a $500,000 home, not buyers who want a $450,000 home. Homes listed for $500,000 also compete with the other homes that are offered for $500,000 – if your home is only worth $450,000, it will not compare well.

If you plan to reduce the price later, you’re reducing the number of potential buyers that will see the home. Trying out a higher price for a few weeks sounds like a great idea, but experienced real estate professionals know that the longer a home sits on the market, the more buyers think there’s “something wrong” and are less likely to make an offer. Take a look at this graph – it’s easy to see that showings decreases pretty dramatically after the first week on the market.


Homes that are listed above market value will eventually sell if the homeowner reduces the asking price. But, the home will sell below the actual market value because of the perception that hte home is unsellable.




Don’t make the mistake of thinking buyers are uneducated. Call us for a free, no obligation Comparative Market Analysis and find out what your home is actually worth!

Tag Cloud

%d bloggers like this: