Be prepared for the counter offer
After you make an offer on the home of your dreams, responding to the counter of your offer is important. In an ideal world, the homeowner will accept your offer without question. Sure, it happens, but in the more realistic world, you will have to consider the homeowner’s counteroffer. Responding to the homeowner’s counteroffer is an opportunity for you to either make or break the purchase of a home.
By not jumping on the counteroffer you are allowing other buyers the chance to sneak in with a better offer, or any offer that the current homeowner is willing to take. Anticipation is key. Your agent can help you make an educated guess at what the homeowner’s counteroffer will be. Don’t wait to discuss what you are willing to, and not willing to negotiate. If you are willing to go higher with the homeowner taking care of repairs or offering a credit then be prepared with that offer. The same is if you are not willing to budge. Good communication with your agent and your needs or expectations is important for a quick counter.
Talk to your agent
You should always remember your real estate agent when you are making an offer. Whether you have bought one home, or multiple homes, it is likely your agent has been through this process many times more than you and can make good recommendations on what they think the house will sell for as well as reasonable contingencies.
In addition, your agent can approach the seller with any questions you have before making an offer, or in regards to a counter offer.
Try to get the scoop on the seller
While not always possible, you may be able to find out information on the seller that is useful in making your offer. The situation of a seller can work to your favor. For example, if a seller is motivated to sell because he or she has been transferred to another city for work. Or, perhaps the house has been on the market for several months, and the seller has already purchased a new home. Both of these situations may suggest that the offer can lean in your favor. That is if you are the only offer on the table.
The same goes the other way. If the seller is an unmotivated seller and contemplating renting out their home if they don’t get the offer they want, then maybe you will have to compromise more than you’d like. Perhaps, the home is a hot commodity, or only been on the market a short period. Maybe the seller simply isn’t in a hurry to move until they receive the offer they are looking for. Any of these circumstances may put the negotiation on the seller’s terms. However, you may be able to find better footing by leveraging a little compromise.
Review what you can afford
For many buyers who have been looking at homes at several hundred thousand dollars, it can be easy to think that upping your offer by $10,000 or $20,000 isn’t that big of a deal. Yet, be careful. It is always a good idea to run the numbers through your mortgage professional. Sometimes a higher offer may not affect your monthly payments, but you may also be surprised at how much the interest, taxes, and insurance can tack on.
When you talk to your mortgage professional, it is a good idea to have them run your monthly payments through several price offers, so you know what to expect if you have to make a decision between a higher counteroffer and a lower one.
Consider writing a personal letter to the seller
Don’t ever underestimate the power of the pen. You need to remember that to most people their home is an extension of who they are. People want to know their home will be left with another good family, and people who will care for what is essentially part of their self.
By writing a letter to the seller on why you want the home, noting specific features, and how much it will mean to you and your family to have the home you may just give yourself an edge. When you provide a personal letter, possibly even photos of your family (and don’t forget the dog) you are putting a face to a name, and taking yourself outside the bounds of simply being another number.