You did it! You’ve found the perfect house. Now you are imagining yourself moving in. You can already see your furniture in the living room. But first comes the home offer. What could go wrong?
Well, there could be multiple offers. Or you could submit a weak home offer. Or what if the seller picks another offer?
It’s not time to panic. You can make a home offer that can’t be refused without going over budget. Here are some tips using human behavior to make the best offer to the sellers.
Motivation
You have to know the seller’s motivations to get the deal done. It’s true, even if it sounds like a self help gimmick. Everyone is motivated by something and you need to view things from the seller’s point of view. Taking the time to do so can help you write a killer home offer.
Typically, sellers are usually motivated by one of three things: money, emotional attachment or a rush to get things done.
All sellers are at least a tiny bit motivated by money so that will typically overlap with the some of the other motivations. If the sellers are really attached to their house and you’re head over heals with the house you might have an advantage. You still need to come in with a strong price though, as going in below asking and thinking you’re going to win is a big mistake.
If you want to find out what really matters to your sellers, you might have to do some investigative work. You can contact the listing agent and talk to them to get a good idea of why the seller is moving and what their situation is. Sometimes they are just in a hurry to move and will want the quickest and easiest closing terms. Other times sellers are emotionally connected and want someone who will love the house like they do. But then there are sellers who just want a lot of offers to try to get the highest bid.
You might not be able to find out everything; it all depends on how much the listing agent is willing to disclose. But you never know – a spur of the moment convo can give a lot of info.
Motivated by Money
When the seller is motivated by money, you’re just going to have to put in the highest offer to get the best chance at the house. If it’s a seller’s market, the listing price is only a starting point.
In today’s hot market, buyers need to be prepared to over bid. Look at comps to get an idea of what to offer. You’ll want to look at recently sold homes in the area to get a feel for price ceilings (or floors).
If find yourself in a bidding war, you might not get the negotiation you expect. It’s typical in today’s market for sellers to ask for best and final offers and the the sellers just pick their favorite.
Motivated by Terms
When sellers want the deal done fast they are motivated by terms. You might have to let go of some contingencies to speed up the process of the sale. It can be hard to decide what to give up but typically it will come down to your peace of mind.
It’s common right now for sellers to disclose the termite and home inspection reports in an attempt to persuade buyers to submit an offer without contingencies. If those reports look good, you might want to waive the contingencies and speed things up. Another trend that is happening lately is buyers waiving their appraisal contingency. If the home does not meet the offer price, the buyer must still purchase the property.
Before deciding on to pursue one of these options, make sure you understand what the result could mean. It does not do you any good to “win” the home only to find out that there many more (and plenty expensive) problems waiting.
Motivated by Emotions
When a seller is really attached to a home, it’s going to be hard to let it go. You can show the sellers how much you love the property by writing a personal letter. Be genuine and emotional when writing and you could see the seller swing your way.
Creating the perfect home offer is part art and part science. You need to collect as much info as you can and then harness it to your advantage. Do your research and be sure to understand all of the consequences before you commit to anything.
