The SMART Way To Make an Offer Lower Than The List Price

Every real estate transaction is a dance between buyers and sellers that can go on for months. Both parties want to be profitable from the transaction; and to achieve this, they may have to go through several bouts of negotiations.

However, not everyone is a master negotiator. So to help buyers get the most bang for their buck, we've devised this list of elements that provide a smart way for buyers to make an offer lower than the list price.

Know the stats
You need to do your research here. You can't just offer a lower price for a property and expect the seller to jump without a second guess. You need to work with your Realtor to get specific stats like what the fair market value would be for the property you're interested in. Ways they would get this information would be by evaluating the list price of that specific home versus those of similar homes. Your Realtor would also compare the list price versus the selling price of the home as well as the number of days the home has been on the market.

Follow a set communication process
Its always better to convey any communication to the seller in writing via your Realtor. When presenting your offer, your Realtor will draft the letter, including some statistics mentioned above, and present it to the seller for consideration. If you wish to further explain your lowered offer to the seller or tell them about your feelings about their home, you may write a personal letter to them which is often times a nice touch. Personal letters may also touch the emotions of the seller and make them more inclined to take a lower offer on the home.

The seller must be motivated to sell
This is the main reason any seller will accept a lower offer on their property. A seller may be motivated to sell if they have already closed the deal on a new home and are scheduled to move soon. There are many other reason for seller motivation. Any reason it is, you need to do your research to ensure that the seller will even be inclined to budge given a lower offer before presenting one to them.

Make your lower offer attractive
If the seller doesn't seem to have a clear cut motivation to sell quickly, you may need to entice them to accept your lower offer with some offers from you. You'll need to be able to offer some compensation for the loss in profit from a lower offer like flexible closing dates or accepting all closing costs. Another thing that may make a lower offer more attractive would be having a mortgage pre-approval letter to show the seller that your funds are secure. Make sure you present ample benefits the seller will enjoy by accepting your offer.

Get the most out of the list price
Conversely if the seller refuses your offer, you can still benefit by ensuring you're getting all you could out of the cost of the home. You can request that the home be sold with the existing furniture or appliances which will save you those costs after moving in. You could also ask the seller to cover all closing costs, allowing you to use that money in upgrading your home. Get help from your Realtor in finding different ways you can get all you can out of the list price of the home if the seller won't budge on price.

This process may seem like a long journey to acquiring the right home, but in the end it will be worth it. Take your time and plan out your offer strategically. Present it with the right facts and make it work for both your seller and you. In the end, you'll walk away with a profitable investment and the home of your dreams.