Have you ever considered offering on a home, well below the asking price? Has your Realtor, friend or family member made suggestions on how to do it? Have you ever wondered what tricks are most effective when "low-ball offering" on a home?
The WareInToronto Group strives to give you unbiased, honest and helpful tips and tricks when buying, selling and investing in real estate. We believe that the real estate industry has been veiled in "secrecy" for decades and is primed for a disruption. Our approach is to add value through the dissemination of strategic information that the general public may not be aware of when working with buyers and sellers. This is just one of the ways we add value when working with our clients.
When you're considering putting in a low-ball offer, we suggest the following;
1. Review recent comparable sales - be able to justify your offer price. If your offer price is bordering on "insultingly low", you should be able to justify your position/offer by referring to a reasonably recent sale that you can draw information from (ie. this home sold recently and when comparing your home to that home, this home is significantly less desirable because of "insert your rationale/justification here"). Without some reasonable justification for your low offering price, the Seller and listing Realtor will disregard your offer and may not even sign it back.
2. Understand the market dynamics and the Seller's situation - where is the market headed? Is the overall trajectory of the market trending upwards or downwards? Has the Seller been on the market for 6 weeks without an offer or have they already received a few offers that they haven't worked with? Has the Seller received an offer where the Buyer chose to exercise their right to back out of the transaction (added frustration for the Seller)? Is the Seller separating/going through a divorce? Do they need the money? Did they buy another home?
These are all extremely valuable pieces of information that your Realtor should be using to help you negotiate a lower price. Understanding how to use these pieces of information to your advantage during negotiations can save you thousands of dollars, if utilized properly.
3. Role reversal/Understand the Seller's position - take a moment and imagine if you were selling the home you're considering offer on. If a Buyer were to bring you an offer at the price that you are considering offering, how would you respond? Unlike many business transactions, residential real estate is tied very closely to an emotional component that is often overlooked. Occasionally, a very low offer is regarded as a personal attack on a Seller or the Seller's taste/design of their home and can result in the Seller being unwilling to negotiate at all. If the Buyer wants the home, they may end up paying more than they would have if the initial offer wasn't so low that it was viewed as insulting.
Working with a knowledgeable Realtor can save you thousands of dollars. We hope that whoever you choose to work with is being open, honest and providing you with the insight you need to get the best terms and lowest price for your next home!
Happy home hunting...
The WareInToronto Group.
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