The home of our dreams vs. the dump that has a low price!

How low can ya' go?

Skip, we have found the home of our dreams, and we have decided to offer 50K under what they are asking because it is a "buyers market"!  Let's ask a few key questions before we go too far...
1. Are the sellers close to the true market value?
2. Do the sellers hold a mortgage that will prevent them from accepting a low offer?
3. Have the sellers done improvements to justify their price? 
4. Has the seller gone through multiple price reductions, and when was the last reduction ?
5. If you were the seller, how would you react to your offer?

 "Hey Skip, isn't any offer is better than no offer?"....Yes!  I have heard this statement a lot with the economy like it has been in the last few years.  Any agent who has some experience under their belt will tell you that AN offer is better than NO offer; just keep in mind, this is a place to get the negotiations started.
"I have been listening to the media, and they are saying the deals are better than they ever have been in years past, so I think I should come in really low and get a steal of a deal."  Yes, I agree, so let's just take a scenario to illustrate my point...the sellers of the home you have fallen in love with have been reducing the price of their home with the fall of the market, and I show that to you by showing you their price drops over the time the seller has had the home listed.  I, as your agent, have shown you the Current Market Analysis which reveals the sellers have the price very close, or below, it's true SOLD value.  You also note that the home has a long list of upgrades like granite countertops, hardwood flooring, sprinklers, etc., and has been well-maintained, which does not seem to match the other homes you have been looking at in your price range. So now, you tell me, is the 50K under asking price offer a reasonable expectation on our part, as a potential buyer?  I would say no.  If you offer something that low, you should expect the seller to come back really strong on their original price, with the thought you are not a serious buyer.  If you want to come in really low on an offer, one way to shore up the seller's confidence in your offer is to increase your Ernest Money Deposit or EMD, which is usually 1% or $1000, to let's say $5000, which would make the seller think you were more serious and really capable of purchasing their home.  Make sure you have a proof of funds and/or a pre-qualification letter from your lender to show your ability to purchase their home. Keep in mind some of this is a mind game on our par,t and if we can stack the cards in our favor, we should.  This is a wonderful time to buy with interest rates so low and the home prices really low.  It has never been a better time to buy.  Just keep in mind you need all the facts to really get the best deal out there!

Grace and Peace...

  

 

Skip Geiser

(850) 221-6442

www.SkipGeiser.com

SkipGeiser@live.com

The Geiser Team with Main Street Properties