Never Accept the First Offer

That’s great advice I heard from a great agent many years ago. I’ve used this advice in my whole career and always share it with my clients.

I don’t care what the economy is doing…Never Accept the First Offer!

That sounds like crazy talk when considering the current housing market. But remember that the offer you get on your house will have several parts to it and you need to consider them all. There are several ways you can negotiate for better terms, even as a seller in a buyer’s market.

First,the most important factor in the offer is the price. Are you satisfied with it? Chances are that you won’t be. No one is happy to get low ball offers, and if the buyer’s agent has half a brain, you’ll be low-balled if you’ve been sitting on the market.

(If you are new to market and you have an offer quickly, this is the exception. What it means is that you did great work getting ready for the sale and that you probably listened to your listing agent’s pricing advice. Good for you. Still, don’t accept the first offer. Negotiate something, even something other than price.)
Anyway, here you are with a low-ball offer. Your agent may tell you it is reasonable, but it doesn’t change the fact that it feels like a low ball.

There are three reasons to counter offer:
1. The buyer expects it.
2. If you don’t, the buyer will think he or she is overpaying
3. You’ll feel better

Take everything else in the offer into consideration, though, before you go back with any counter. Other than price, you’ll have to factor in the timing and qualification of the buyer.

By the timing of the offer, I mean the closing day. Can you move out by the time the buyer wants to move in? Do you know where you are going? Maybe the home is already vacant and you need the buyer to close sooner. Make these needs be known…you never know the other sides flexibility until you ask.

Another variable is the buyer’s qualification. If the purchase will be in cash, negotiate a bit, take the money and run. You’ll be sparing yourself a lot of stress with a cash buyer. But good luck finding one of those cash buyers.

With a mortgage contingency, you want to make sure the buyer has been pre-approved and has plenty of funds to buy the home. That the buyer is approved for much more than the house price is a good thing, no necessarily a place to negotiate a higher price. Be glad that the buyer is not overreaching and risking being rejected by a bank.

When you are negotiating, you need to know what is going on in the market with comparable properties and listen to your real estate agent’s advice. Chances are the agent has seen many more houses and sold a few while you’ve been sitting there. That being said, don’t forget to make counter offers and never be shy of negotiation. Negotiations are not a conflict, they are a way to reach an agreement. You are holding a few cards so play.

Do you know your absolute bottom price, any lower and you won’t sell the house?