Thinking about buying a home? Great! But please remember, even if you have a few prior home purchases under your belt, there are changes to local customs and standard contingencies that were not necessary even a few years ago. There are also additional situations you might get yourself in, where having a seasoned, professional and experienced Realtor (like me) would be of great benefit to you.
Making an offer on a home can be intimidating, whether it's your first home, your second home, or even your fifth or sixth home. It's almost like asking that girl or boy you had a secret crush on in high school for a date. Of course, there is very little risk of making a fool of yourself during the bidding process, but you really should know how to play your cards the right way before you "tip your hand", so to speak.
Once you’ve decided on the home you want to buy, your Realtor will draft a binder agreement, which is a pre-printed form that is filled out with the address of the property, conditions of sale, and contingencies. This agreement is to be signed by you and accompanied with a one percent deposit check. Also, I include a pre-approval letter from the bank or mortgage company, as well as the state required signed disclosure forms. This binder agreement will in turn, be submitted to the sellers agent, or directly to the seller (FSBO's)
That's when we really begin. The seller can respond in one of three ways: accept the offer, "counter" it with a different price and/or terms, or reject it.
If you choose to make what could be considered to be a low offer-
Most sellers assume, especially in a buyers market, that you would bid below asking price, unless the home was priced below market value in order to sell it immediately.
But, if you bid 20 percent below what a seller wants, it may be a tougher negotiation. Many experts advise against subtracting more than 10 percent from the owner’s asking price, although you can certainly sweeten a relatively low offer price by guaranteeing the seller a quick closing, few or no contingencies, and/or a larger deposit.
When a "Highest and Best Offer" is requested.
Sometimes there are multiple bids on a property, or the sellers ( or their agent) get restless during negotiations and ask you to submit your highest and best offer for the home. Don’t go that extra mile if you are not 100 percent sure that you want this particular property. A highest and best bid is just that. Think of it this way- if your H&B bid was for $800,000 and you were upset if you found out that you struck out on negotiations because $805,000 was the winning number, that you would not be upset that you didn't bid the 805k. You would be at ease because you gave it your best shot, or offered the very top amount that you would pay. If the sellers wanted just $100 more, you would feel the same way. It was enough. That, by definition is highest and best.
... And tere’s nothing wrong with agreeing to pay the seller’s full asking price without negotiating at all . If the home of your dreams is worth the price it is listed at, and you really want it, go ahead and just offer to pay the full asking price. There is no shame in that. Do you want to see your dream home slip through your fingers because you want to pay $1,000 less for it? Another buyer may show up five minutes after you, eager to pay that difference- or push you both into a bidding war, where you end up paying OVER asking price.
Which leads us to ..... Bidding wars
If you find yourself in a bidding war situation, it is entirely up to you as to what your next steps are. It can be very frustrating. As one of a sometimes unknown number of rivals in a bidding war, you’re competing against each other blindfolded. Neither you nor your agent will know what price the other offer or offers are, and what any terms of those offers are. *Refer to Highest and Best Bidding.
Every offer situation is different. Each home is different. There are a few standard "rules" for offers, but remember if something is important to you, put it in writing.
It is always best to keep email records, and if possible written records of all of your correspondence, questions, and written documentation, including any changes to agreements made with any involved parties.
Here comes the shameless plug- The first best step is to call me (203) 257-5892 :)
Buying or Selling a Home in Fairfield County? Contact us!
If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me. I know the market like the back of my hand, know marketing inside and out, am a skilled negotiator- and I'd love to be on your side :) - Judy
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