Negotiating With A Seller

Let Your Prescott Realtor Guide You

Your real estate agent will guide you through determining the right price to initially offer. It’s always best to let your Prescott real estate agent present an offer without your presence since they have been trained in negotiating techniques and can detect for signs of an urgency to sell. However it is exclusively your decision to determine an offer price with any conditions to the offer. These following hints will help guide you through the negotiating process.

Be Aware of Conflicts of Interest
Homebuyers will drive-by a home for sale and contact the real estate agent listed on the for sale sign. Realize that the contact agent is probably the listing agent for the seller. As such, they are obligated to represent the interests of the seller and not the buyer. This conflict of interest could be a disadvantage for you as a Prescott homebuyer. Often it is best to hire your own real estate agent who will exclusively represent your interests. Hiring your own Prescott Realtor costs you nothing since the seller pays the commissions so you may as well strengthen your negotiations position by hiring your own agent.

Loan Prequalification and Preapproval
A loan prequalification gives you a negotiating advantage. A loan preapproval will give you a greater advantage. Having a preapproval letter with an approved loan amount tells the seller that you have been approved to buy their home providing it is within the approved loan amount and the home passes the lender’s inspection. You become a more credible buyer. Depending upon the seller’s urgency to sell, they may accept your lower offer price versus that of another buyer who has yet to be approved for a loan.

Since you would be preapproved, an escrow close could occur quicker with less potential of last moment problems with a mortgage lender rejection.

Determining Your Initial Offer
You first need to know what a reasonable market price is. Have your Realtor prepare a Comparable Market Analysis for similar homes previously sold in Prescott within the targeted neighborhood. An appraiser will only generally consider comparable sales within the previous six months.

It is important to know whether asking prices are trending up or down.

Consider Seller Motivation
Consult with your agent to try and determine the urgency of the seller to consummate a sell. The length of time the home has been on the market could be key. If it’s been for sale for a long duration, the seller is more likely to consider concessions. The sale could be motivated by a divorce, a possible foreclosure or a job transfer. The seller may have purchased another home that is nearing escrow close and they may be stuck with two mortgage payments. On the other hand, a seller may very well be willing to “wait it out” until they are offered the asking price.

Key Strategies To Consider
When previewing a home, do not show any positive emotion. If the owner is present, be courteous and friendly but do not demonstrate your excitement of any features. You don’t want to give the seller any hints that you are anxious to buy his/her home.

Consider being flexible with your moving dates. The seller may need some extra time after closing for convenience. Considering a “leaseback” for a short time may give the seller access to funds from the sale to accommodate his/her closing on another home they are purchasing. If the situation fits, the seller may consider a smaller offer because it fulfills convenience. A word of caution…do not enter into a leaseback of more than 30 days because the lender may consider you an investor and could get a larger interest rate.

Making Your Initial Offer On A Prescott Home
Rarely is an initial offer accepted by a seller. Therefore consider offering a price that is well below what you are actually willing to pay. Typically the seller will count-offer and if you get lucky that counter-offer may be well below what you were willing to pay.

Always make your offer contingent upon a home inspection. If a home inspector uncovers construction or repair problems, it gives you the opportunity to rescind the offer or gives you an opportunity to renegotiate.

Conclusion
The goal is offering a price that is reasonable enough to get the home at a price that is less than you are actually willing to pay without insulting the seller. You want the offer to be close enough that the seller isn’t willing to lose the sale to you as a strong buyer.

Additional articles of interest to Homebuyers.

Steps To Buying A Prescott Home
Negotiating With A Prescott Home Seller
The Internet Is A Great Tool
Is A Home Inspection A Big Deal?
A 1031 Real Estate Exchange
Hire Your Own Agent When Buying A Developer Home
The Need For Homeowners Insurance
Why You Need Title Insurance

G.E. "Ted" Tedford, Jr.
Mobile: 928 420-3975
Fax: 928 775-3525
Email Me

Home Smart
5611 N. 16th St., Ste. 100
Phoenix, Az 85016