How To Get the Best Deal
1. Seller’s Situation
Obtain as much information as possible about the seller’s situation. Pull the title to the property. Talk to neighbors. Conduct some research about past MLS listings.
Do the sellers have a deadline when they have to move? Use that deadline to your advantage. By meeting that deadline, you can negotiate thousands of dollars off or achieve better terms.
3. Exit Strategies
What are your exit strategies? Why are you really buying this property? Construct the offer so it meets your investment and exit strategy.
4. Non-Accepted Offers
You’ve made the offer, included a cover letter, considered the timing, the motivation, the price, but it’s not accepted. Let the seller call you back. Wait a few days. In a slow market,
flat market or down market, unless the property is well-priced or well-positioned, the property will likely sit.
Let’s say your offer isn’t accepted. Have your realtor go back or simply ask the seller, “You know, I’m just trying to figure out a way to buy your home. What other options do you have?” And then listen. Let the seller figure out a way to sell his/her home sold that will work for both of you.
Hint: In your offers, use the condition that makes the offer subject to the approval of your partner. You want to make your offers conditional on terms such as financing, property inspection and buyer’s or lawyer’s approval. You need something called a “weasel” clause which is a way for you to get out of the deal if something goes wrong.
5. Cover Letters
When you make an offer, be sure to include a cover letter. In that cover letter, explain why you are offering your specific amount. This is especially true if you’re offering a lower price or what appears to be a substantially lower price.
Your realtor can provide support with comparable on another page; possibly the last two-five sales of a condominium, apartment building or house that is very similar and at the price you are offering.
“Dear Mr. Seller,
The price I’m offering is $390,000 which you might think is crazy. I understand why you may be thinking this. However, here is where I’m coming from…”
Then list why you’re offering your specific price. Make sure to do this. This strategy will calm the seller down, regardless of whether you, your realtor or the listing realtor is presenting the offer.
We want to get past emotions. Agree with the seller if your offer is too low. Explain how to see things from their point of view. Then move on and explain the issues and present your case and your point of view. Ultimately, you’re looking for some agreements on these points.