Here’s the dream: Your offer is perfect, you don’t need to negotiate, and you can spend the next few weeks addressing more pressing home-ownership questions, like “Why is it called wainscoting?” and “Do I want a new couch in blush or emerald green?”
And it could happen. Many sellers accept the best offer they receive, and for a variety of reasons.
But sellers are also known to reject offers for a variety of reasons. Or make counteroffers. This is especially likely if you bid low, or when you’re up against multiple competing offers.
Here are a few rules every buyer should know before they — and their agent — start negotiating:
Act Fast — Like, Now
When you receive a counteroffer, you should respond quickly — ideally within 24 hours. The longer you wait, the more space you leave for another buyer to swoop in and nab the property. Also? If a seller senses hesitation, they may decide to withdraw their counteroffer before you even have a chance to respond.
Raise Your Price (Within Reason)
While you obviously don’t want to overpay for a house, you may have to up the ante — especially if you initially made a lowball offer. Lean on your agent’s expertise to determine how much money you should add to the Got an Offer Strategy?Before you make an offer, talk with your agent about how high you’re willing to go if the seller doesn’t accept your bid.sales price to make it more enticing to the seller.
Then, through their powers of persuasion, your agent can make the counteroffer look even more attractive by pointing out similarly priced “comps” — recently sold homes in your area that are comparable in terms of square footage and features.
As your agent negotiates, it can feel like things are escalating quickly. It’s stressful. You may feel a sudden urge to do whatever it takes to win.
Before you go overboard, there are two things you must keep in mind:
You can’t exceed the monetary confines of the pre-approved mortgage you received from your lender.
You shouldn’t overextend your budget.
Because your counteroffer has to be an amount you’re comfortable spending on a home. You want that new house and to keep living your life. Plus: You’re not out of options yet.
Increase Your Earnest Money Deposit
Increasing your earnest money deposit (EMD) — the sum of money you put down to prove to the seller you’re serious (i.e., “earnest”) about buying the house — is another way to show the seller you have more skin in the game. A standard EMD is typically 1% to 3% of the sales price of the home. Making a counteroffer with a 3% to 4% deposit could be what you need to persuade the seller to side with you.
Demonstrate Patience About Taking Possession
Depending on the seller’s timetable, changing your proposed possession date — the date you take over the property — could butter them up, too. If the seller wants to stay in the home for a few days after closing, try offering a later possession date. You could also draw up a “rent-back” agreement, meaning the seller pays you rent for staying in the home for a set period of time after the closing date.
Check back on our blog every week for more real estate advice and local articles about living in Albuquerque. And make sure to follow us on Facebook for up to date real estate news for Albuquerque and surrounding areas.
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