It's Time to Stop Shopping and Start Making Offers

Working on behalf of the Home Seller, I am present at many of the showings as buyer's agents bring their buyers through the seller's home.  I do this as a service for the waterfront real estate owners in Jacksonville, Ponte Vedra, St Augustine, and Orange Park.  I want to make sure the home is presented at it's best, and I want to answer questions about the property and get immediate feedback from the buyers.  I also want to ask every showing to make an offer regardless of their feedback, and see if we can't put together a deal that makes since for both parties.

Being present at the showings, I see a lot of frustrated home buyers and frustrated buyer's agents looking at  30, 60, even 100 houses before finally making an offer.

The one common element I hear from all these frustrated buyers and buyer's real estate agents, is that when they finally find a home they like, it's "overpriced".

Question #1:  Is it really overpriced? My knee jerk reaction when I hear this is that the other 59 homes they have looked at were most likely within their price range and this one is above their price range.  Obviously, you get what you pay for and more often than not, when you pay more for a home, it's a little nicer than the ones that sell for less.

Question #2:  Why not make an offer? We all know the stats.  Too much inventory, lower demand, home owners need to sell.  Why not make a fair offer?  If you find the home and it's just out of your price range or it's just overpriced, it's time to turn to your agent and ask them to be a Deal Maker.

Home Buyers want to work with Deal Makers! Okay so, it's not the only thing they want out of an agent, but it has to be the most important.   I've always worked as a deal maker.  The easiest way to be a deal maker, is to just ask for an offer. It's really easy.  The sellers are identified as saying they want to sell the house.  The buyers would like to buy it.  Now we just need to come to an agreement that both parties can live with.

If you are already working with an agent, and your agent isn't a strong deal maker or negotiator, you need to take on the role yourself.  It's an easy role to take on.  If the house is what you consider to be overpriced, but you really want the home, make an offer!

How to make an offer that will get the attention of the Listing Agent and Home Sellers:

  1. Make it reasonable: If the home is listed for $1.39 million, don't offer $400,000 to "see if they'll take it".  You will look like an idiot.  Instead, have your REALTOR give you a range of offer prices supported by some comparable sales, days on market, etc.  Build a case for the lower price.
  2. Make it in writing: Making a verbal offer is completely worthless.  If you are serious, you have to put it in writing.  Have your REALTOR write up the offer contract and submit it to the listing agent.
  3. Make it with a mortgage pre-approval or cash in hand: You must have proof that you can afford the purchase.  Without it, the Sellers side will most likely just reject the offer altogether.
  4. Make it with a sizable good faith binder: I see way too many offers coming in with $1000 binder.  $1000 is weak.  If you really want to get the attention and be taken seriously, put up as much as you can.  5%, 10%, even 20% are strong binders and show that you mean business.
  5. Make it with the least amount of contingencies: Offers loaded down with weasel clauses are tough to work with.  Sellers don't want to take the home off the market for a shaky contract.  Therefore, include the least amount of contingencies as possible.  Even better, send in a home inspector the day before you make an offer, get the inspection report , and then make an "As Is" offer.  That's strong.

BONUS TIP: Know who you are negotiating with on the other side.  If the property is bank owned or a short sale, you need to know this before making an offer.

Posted by Brad Officer on
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