Last week we wrote about how common mistakes cost sellers thousands at closing and we got a lot of response. We also heard from buyers throughout the country asking for help getting buyer’s offer accepted in low inventory markets. We thought we would write some tips for the buyer side to help them.
In a low inventory market, you must make your offer stand out to the seller. One of the biggest mistakes buyers make is upping the purchase price without regard to their ability to pay more. Sure, they may have a pre-approval letter showing they qualify for more, but that does not help if the property does not appraise more when getting a mortgage.
Your Competition is Other Buyers-Not the Seller
Keep in mind, you are not competing with the seller. The buyer is competing with all the other buyers wishing to purchase the same property. A cash buyer does not have to worry about an appraisal. A buyer putting 50% down may not either. Buyers putting a minimal amount down do, unless they can show sufficient cash they are willing to plunk down in addition to their down payment and closing costs to make up the difference.
One buyer called me from another state asking for advice in another market. They had the chance to buy a home there for $450,000 but did not jump on it right away. They waited a day, and 13 offers came in. Ultimately it sold for much more than what they could have sealed the deal for. Waiting cost that buyer.
They have their eye on another property. He asked if they should put a quick timeline for acceptance on the offer and threated to withdraw it if it is not accepted. My response was, not necessarily. The buyer is not holding all the cards. It is to the seller’s advantage to slow play the offers to generate more interest. Taking an offer too soon may cost the seller.
Seller Can Act at Any Time Regardless of What They Stated
The seller may say they will look at all offers on such and such a date. This may be true, but keep in mind the seller can also accept an offer before that date if they choose to. If you make such a compelling offer that the seller is worried that offer will disappear, you might be able to get your offer accepted. Do not threaten it will disappear as that will turn off the seller. Remember, the seller is not your enemy, but they are the gate keeper. They have what you want, but the other buyers are your enemy.
Negotiating Tip
I would rather softly tell the listing agent we have a certain amount of time to accept simply because the buyer has been shut out on other properties and does not want to miss out again. If this deal is not going to happen, we would rather find out sooner than later as there is another property they are considering. Your home is our first choice, and they would be absolutely thrilled to buy it. If the seller takes too much time, we must move on so the buyer does not end up homeless.
Keep in mind, the buyer still is not holding many cards. It is just a softer way to proceed and may help your chances. Relationships matter in this market more than ever. If your buyer agent is experienced it helps if they have done transactions with the listing agent in the past. A listing agent’s confidence in the buyer agent can go a long way to getting a deal together. Buyers must be educated and soothed, and an experienced agent is better able to help with that, and listing agents know this. Trust between the agents can make all the difference.
Other Resources
We wrote an article back in 2012 that still has some great tips today entitled “Top 10 Tips For Buying a Home in Today’s Market” you can find on our blog at https://blog.topagent.com Just search for that title in the search bar.
Another great article “Selecting Best Multiple Offer Tips From a Real Estate Pro” can be found here.
We hope these tips help. Always call the Ellis Team at Keller Williams Realty 239-489-4042 or visit www.LeeCountyOnline.com for the latest listings.
Ellis Team Weekend Open Houses
Open House Saturday and Sunday 12-3 PM
