| When it comes to buying property making an offer can seem
like a huge step. Whether you are buying your own home, or looking for
investment properties, it's important to get comfortable with making
offers.
You make or lose money in real estate when you buy, not when you sell.
The reason for this is simple; when you buy you can negotiate the price
(i.e. the price you pay is in your control) but when you sell, the price a
buyer is willing to pay is not in your control (i.e. you will only receive
offers at or below market value).
Getting used to making offers allows you to reduce the emotion involved
in the transaction; the more offers you make that are unsuccessful, the
less emotional you are about the outcome and the more willing you become
to make more offers.
Don't Be Afraid Of Making Low Offers
By itself an offer is not insulting, no matter how low it is. In making
an offer, you are simply saying what you would be willing or able to pay;
you are not actually saying you only think the property is worth what you
are offering. A good Agent will present low offers so that the Seller is
not offended.
Why would a Seller accept a low offer?
There are many reasons why a Seller might accept a low offer, such as:
- They have already purchased another property and they need the money
from the sale to close the deal or they will lose their deposit;
- The property has been on the market for twelve months with no offers
and the seller is desperate for any offer so she can move into a new
home;
- They are relocating and don't want to leave the property empty;
- They are leaving the country and need to sell before they go.
What these sellers all have in common is that they are highly
motivated, i.e. they have to sell.
When is a Seller likely to accept a low offer?
When a home is first listed for sale the seller is hoping to get offers
around the asking price. After a home has been on the market for several
months the seller becomes more desperate and willing to consider offers
that would have seemed unimaginable when they first advertised the home
for sale. As a buyer, the key to buying low is to understand the Seller's
needs. Discover the following key facts about the seller:
- Where are they moving to?
- When do they need to be in their new home?
- Why are they moving?
- Do they need to sell this home to be able to move?
- How much equity do they need from the home to be able to make their
move?
- What will they do if they don't sell their home?
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