Tips and Tricks for Making an Offer in a Competitive Market
When yours is the only offer on the table
If you are really lucky you will be the only person offering on the home, not a frequent occurrence but it can still happen, which does make it somewhat easier when it comes to negotiating…and a lot less stressful!
In this situation it is recommended you don’t go in with an offer which might be considered ‘a silly offer’, remember people selling their homes have done their homework too and know their home’s value – and you don’t want to upset the vendor. But a lower offer within a reasonable range of the asking price, say $20-$40,000 below the maximum figure you would be willing to pay for the home, should allow for some room for negotiation, and shows you are serious about purchasing.
Other Tips and Tricks worth thinking about:
Don’t tell the sales agent when you are planning to make an offer, they are likely to try and find other offers if you give them time.
With the help, and advice, of your solicitor you can complete your own contract and deliver/email to the agent, they are then obliged to act on it quickly.
Don’t let pride get in the way of making a sensible offer or meeting the vendor nearer to the asking price, you’ve won in the negotiation if you are getting your dream home at a reasonable price!
Rather than coming to a stalemate over negotiations try increasing your offer by say a couple of thousand dollars. Or offer them something else that isn’t $ related, like a long or quick settlement depending what they need.
Most owners, when selling, need to feel like they are not giving their property away but have negotiated the best deal for themselves. By not moving in any way you are likely to slow things down and you could risk losing the property.
Negotiating when there are other people also putting in offers!
It is frowned upon by the real estate agent regulatory authority for an agent to tell you there is another offer on a property when there isn’t…believe it or not this used to be a common occurrence as a way for an agent to get an offer out of interested buyers!
If the agent does tell you there is another offer (or offers) on a property there are a couple of questions you could ask:
How many times has the other buyer looked at the property?
Have you had a signed offer from the other buyer?
Have these other buyers offered on the property before? – If they have already had an offer rejected then you shouldn’t be unduly worried…but good to know there is other interest
Is there a deadline for offers from other interested parties now you have received my signed offer? What is that timeframe?
When is a good time to make an offer?
Generally it is not a good idea to make an offer on a Friday, there are various reasons for this:
Some agents don’t work on Saturdays, or busy with open homes, especially on Sunday’s
Vendors like to have the results of a weekend open home before considering an offer
Putting your offer in earlier in the week means there is more focus on the offer and you can ask for a deadline of say Friday for an answer
If the property has only just been listed there may be a delay in presenting your offer to the vendor, for example some agencies have a rule that the property has to be marketed for seven days before an offer can be submitted. Or the vendor may want to wait until there has been an open home.
If the agent appears to be delaying for any other reason push back and ask them to submit your offer
Making your offer
Unfortunately if there is more than one offer you may not get the chance to negotiate
With multiple offers being presented to the vendors at the same time there are a number of outcomes possible:
The owner rejects all the offers, this does however give you an opportunity to increase your offer
One of the offers is accepted by the owner
A negotiation happens between the owner and one of the other offerors
The owner might choose to go back to all the people who offered, or the highest 2 or 3 offers that are closer to the price they want for the property. In this circumstance you should get an opportunity to increase your offer so you need to think about what that offer may be
If you really want this property think about whether you would be prepared to lose it for the sake of say $5000 - $10,000, particularly if you have the funds available to increase your offer enough not to lose it.
A really useful tip we heard about is when putting in an offer use an uneven number, something like $531,320 for example. The thought behind this is that those extra few hundred dollars may make all the difference when a number of offers are being presented. It also looks like you have really thought about your offer and have presented it down to every last cent!
If you are really stretched on price think about what else you could offer, quicker (or longer) settlement, reduced time on your conditions, anything that might make your offer stand out.
These are all great tips to keep in mind when house hunting and you find your dream home…and don’t forget Mortgage Ladies & Co are with you every step of the way!