I was talking with a Tallahassee REALTOR® yesterday and we were discussing an offer he had just made on a foreclosure offering in Tallahassee. We discussed strategy for making an offer to a bank (the home had been foreclosed upon and was for sale by the bank that held the financing on the home) and how the strategy had to be different than when making an offer to a typical homeowner.
Regardless of who is receiving the offer, there is a definite plan one should follow if attaining the property at the best price is the primary goal. Too often, I see buyers and agents alike making amateurish mistakes that end up costing them the home that they wanted to buy.
Do Not View Properties That Are Priced Poorly
If you want a good buy on a home, then keep it simple. There are 3,000 homes for sale in Tallahassee, you should only look at ones that are in your price range and that are priced to sell. Think about it. Why go fall in love with a home that is so overpriced that you will have to be “upside down” in it to own it (or get a seller to change their mind by a great degree)?
It is not likely that unrealistic home sellers are going to drop their prices by a large margin. Many amateurs think they should go out and make tons of offers and “try to get a steal,” but as we will cover later, that strategy either backfires when an emotional attachment to a home is created or it results in a ton of wasted time and no purchase of a home. Either way, I do not want to be part of a process that results in dissatisfaction of all parties.
Research The Likely Sale Value Of The Home
Work with a well-trained REALTOR® when buying your home. Make sure you spend an hour or so discussing all the “must haves” and “really wants” that will go in to your home selection process. Here’s a hint, if your REALTOR® has about a 30 page home-buying interview form, then you know that she or he is likely to find all the critical elements of your purchase.
Once the critical criteria of the desired home to buy has been identified, your REALTOR® should use them to reduce the number of homes available in Tallahassee to a workable figure. By doing some key value purges, the best-buys of Tallahassee homes should move to the top of the list. These homes will be the best for you, as they will fit all of your needs and they will priced to sell.
Here’s a funny thing. By doing this work, the small list of homes that your REALTOR® has generated are the best buys in Tallahassee real estate. This means they are most likely priced at or below the level in which they will sell. I have seen quite a few unhappy home buyers who missed-out on buying the home of their dreams because they made too low of an offer and somebody else bought the home.
Remember, if you were able to find the diamond in the rough, it is likely somebody else might have as well. Don’t be afraid to offer full price (or even higher) if you have found an excellent buy. Smart home sellers know that if they price their home low enough, they will be able to negotiate a value up to its worth, regardless of the starting point.
Understand The Likely Motivation Of The Decision Maker(s)
Knowing who the decision maker(s) will be on a sale is very important. If it is a husband and wife, then you know that most likely a lot of emotion will be attached to the value of the home and you will want to make sure your offer is written with this in mind. If, as in the example listed in the opening paragraph, the seller is a bank (read that as one or more employees at a bank whose job ends at 5:00 every day), then you must expect very little emotion and often times very little concern about the final disposition of the sale.
This is a very important point. I have heard many times an upset buyer get emotional about non-responsiveness from an institutional seller and start to make decisions based upon the seller’s behavior. The fact is, most institutional sellers today are overwhelmed with files on their desks and their responsiveness will be very slow and very unemotional. A great short sale REALTOR® will know how to make institutional sellers respond over time.
Remove As Much Of The Emotion As Possible For The Home Buying Process
Regardless of the emotional level of the home seller, it is key that you, as the real estate buyer, remain as unemotional as possible. By following the key steps above, you will identify homes that meet your needs and that are priced very well. By hiring a great REALTOR® and doing the proper preparation work, you will have ensured that you get an excellent buy in the real estate market.
It’s fun buying a home when you start to realize your dreams of home ownership and all the great features that the new home possesses. By selecting only homes priced very well, when you become emotionally attached to that great home that you found, it will be OK. And nothing is better than the excitement of getting an excellent buy on a perfect home for you and your family.
Make A Compelling Offer To Buy A Home
The art of the offer in today’s real estate market is about making a compelling offer. The owner of the home for sale, whether a single person, a husband and wife, or an institutional investor, should see your offer as fair and should also be worried about “chasing you away” with a counter offer. Great and compelling offers are typically not countered by the seller in today’s real estate market.
Again, don’t be afraid about offering full price (or more) if your REALTOR® thinks there is competition for the home. While most homes for sale in Tallahassee will fail to sell this year, the ones priced at or below market are constantly being shown and often times are receiving multiple offers for purchase. Your offer should be so compelling that the seller just says “YES!”