There is no fixed method to making an offer. Each sale is different and has to be viewed strategically depending on several variables.
1. The asking price
This is the first aspect we will look at; understanding the market and what comparable properties have been selling for in the location is a good indication of how we will approach an opening offer. If the seller has priced the property unreasonably high then making an offer lower than asking price or comparable to recently sold properties is perfectly acceptable.
It may well be that the seller has priced the property close to or lower than similar properties that have recently sold in or close to the property location. This is not a bad strategy as it will generate substantial immediate interest and in many cases may lead to offers higher than asking price and perhaps more importantly – a quick sale.
When we identify such properties we have to be willing to move quickly and be aggressive with our offer as such listings generate a lot of interest and subsequently more offers.
2. Length of time the property has been on the market.
By general rule a seller may not be willing to accept a lower priced offer if the property has been on the market for less than a month. The sellers strategy most likely will be to offer the property slightly higher than they expect, hoping they find buyers willing to pay a premium for their property. Therefore may be unwilling to accept a lower offer until they have given the sale a reasonable time to develop.
This does not mean you can’t offer lower than the asking price – it just means that you have less chance of success.
3.Motivation of seller.
Because a seller has listed a property for sale does not necessarily mean they are anxious to sell – especially at lower than they believe their property is worth.
Property owners may have the attitude that if they get the value they are looking for they will sell but if not, they are quite willing to hold out until they do. This is especially pertinent to property that is in the rental program and is generating revenue for the owner on a monthly basis. Sometimes it’s a good idea to look at the sale from the seller’s prospective – If you were generating a good return each month from your property and you have no immediate need to have to sell – would you sell it for less?
4. Motivation of buyer.
Your offer strategy may well depend on how important securing a particular property is to you.
You may well spend months researching locations and property and all aspects of owning and renting a property and finally the exact property that fits your criteria comes on the market.
Should you risk losing it for a few thousand dollars?
5. The agents.
A large part in brokering a deal can be consolidated when you have two good agents working together to create a framework for a successful offer. Many times communication between the listing agent and the buyer’s agent can result in a mutually agreeable offer price that works for both parties prior to an offer being officially delivered. This should be one of the most important aspects in your decision to work with a seasoned professional who has an excellent reputation within the industry and who can lobby your interest in a property and your ability to complete the sale.
One of the biggest questions a seller has when looking at an offer is “can the buyer complete the sale.” Your agent may even be able to sell your offer on the grounds that you are a solid buyer and as so, a better alternative to complete the sale than perhaps a higher offer.
There is little a seller fears more than a buyer who cannot complete a deal after they have taken the property off of the market and turned down other offers. This can be a vital component to securing you the sale.
There is a lot more to the offer strategy than taking 10% off and making an offer. These are some of the main points that we look at as your advisers on how to approach the offer process and each sale is unique.
We will strive to get you the very best price on your purchase but most importantly we will focus on securing you the sale by making your offer as attractive to the seller as possible while getting you the best value for your money.
Vacation Home Specialist