Let’s Make a Deal!
When I was eight years old, my great-grandparents gave me a book entitled “Now You Are 5!” Soon after, I held a yard sale. I really wanted to get rid of that book. A little kid came with his mom, and I went over and asked him how old he was. “Five.” Boy, did I have a book for him!
That was my first intentional, pointed sale. The stakes are higher now, of course – houses, not 25-cent-books – but the mindset is the same. Eyes and ears wide open, and don’t be afraid to put yourself out there to make a deal.
Making deals is in my DNA. My ancestors have lived and died by deals (Armenians and Russian Jews – I’m not hyperbolizing), and it’s something that comes naturally to me. The last home I sold, I countered an offer that came in a bit low with an amount over the asking price. The agent was surprised and wanted to make sure he heard me right, but it worked. I got my seller the bottom line he wanted. It wouldn’t have happened if I hadn’t asked. You have to go for what you want. Don’t be shy, and don’t be afraid of offending the other party. You won’t, if you do it right.
You don’t offer Safeway $5 for a $4 box of cereal, so why would you pay more than you have to in buying a property? In a word, emotions! Buying and selling homes, it’s easy to get caught up in the feeling, the place you’ve made memories in, or the intense need for that particular home, but don’t lose sight that it is a financial transaction.
In a non-super-competitive situation (maybe where a property has been on the market for a while), if you want to buy a place for less than top dollar, you have nothing to lose when you go to a seller with a lower offer. There are nice ways to do that. With a smile, for example. Don’t be disparaging. Your agent can have a list of comparable sales to make your case, but maybe also play up the “young people just starting out” thing or the “just had a baby” thing. Don’t be disingenuous, but market yourself as someone they should sell to for less.
Take this example. Buyer’s agent emails seller’s agent. My clients, they’re new parents, and they absolutely love the home, the street, the neighborhood. They do have some concerns about that soft spot in the kitchen floor and the hole in the roof, though, and with that new baby, they don’t have a lot of extra cash for repairs. We’d like to offer $X with a $X credit to get those things fixed up. Now you’ve gotten hopes up for a sale, painted a lovely family into the house, pointed out the things that might jeopardize the deal, and then offered a way to make it still happen. Does it always work? Of course not, especially if there’s a higher offer. But if there’s no other offer, you’re at a good starting point for friendly negotiations.
Will people be offended at an offer lower than the asking price? Would you be? Say you had your house listed for $875,000, and an offer came in for $870k. How about $860k? Let me know when you’re getting offended. $850k? It’s hard to say, right?
A lot of factors go into the equation, like how fast you need to sell, or if it’s a cash offer, or if it’s the only offer after 45 days on the market, or if you are secretly willing to go to $800k. The point is, a buyer can’t know exactly what the seller’s situation and motivation are, so it’s better to ask and not receive than to assume the seller wouldn’t want to entertain your offer. If your offer is way too low, though, negotiations may start on a sour note or won’t happen at all, in which case you’re not getting that home.
Obviously all bets are off when a property is like chum in the water. Sorry, but there’s probably not going to be too much negotiating, not downward anyway. Your best tools are throwing money at it and having the cleanest offer, which means the fewest contingencies possible, meaning it’s less likely to fall through. Having to sell a current property first is pretty much sudden death in a multiple-offer situation. Then there’s cash vs. financing, and the inspection contingency. (I’ve said this before: do not skip the inspection, but you could inspect it before you submit the offer, in which case you can skip the inspection contingency, thus making your offer that much more attractive.)
Look Out, Listen Up
Let me preface this by saying that the following tactics are not necessarily needed (unless you feel like they might be), and they didn’t sound psycho until the words were in black and white. The intention here is not to be creepy but to have more information to make a more informed offer and edge out the competition.
Your agent should be asking questions of the seller’s agent, and gleaning information to help write a successful offer. You can go to an open house and notice if the sellers own a pet or if they have kids. Don’t be a stalker about it, but note any obvious likes, or that a cat or dog lives there. Also, listen up – neighbors might be there. What do they have to say about the house or the block, or the reason the owners are selling? Maybe they’re being relocated, in which case they’ll likely want to want to wrap things up quickly and cleanly, in which case you don’t put in your offer that you want items fixed. (You can ask for a credit toward repairs, but the repairs are on your time, not theirs.)
If you think it’ll help your case, and if you can live with the cheesiness, add a personal note to the seller with your offer. (“Our dog will love playing in the yard! Our cat would love to curl up in the sun of the bay windows!”) Their agent is certifiably crazy if he or she actually passes that stuff to the client, but it doesn’t hurt to try. You could also circumvent said agent and send something directly to the seller, like a small gift for them or their pet. It’ll make you stand out as either an awesome person whom they should sell to, or in a competitive situation it might give you an edge if all other terms are equal.
Bottom line here, folks: if he looks like he’s in the ballpark of age five, don’t be afraid to walk up to that kid and ask him how old he is. Go get ‘em!
Heather Schoell is a Capitol Hill REALTOR with Berkshire Hathaway HomeServices PenFed Realty and can be reached at firstname.lastname@example.org, at the office at 202-608-1880, or by cell at 202-321-0874.