We are in a fierce seller’s market. This is no surprise to anyone. When the market is like this, an offer needs to be competitive, obviously, but also it needs to be bulletproof once the offer has been accepted.
That means it must be able to withstand a lot of back-and-forth in order to make it to the closing finish line.
Sellers typically want three things: high price, low risk, few hassles. They are looking to minimize uncertainties about the sale going along as planned and don’t want to run around repairing a long list of minor cosmetic defects. Many buyers will offer a competitive price, but those who approach their negotiations with “smooth transaction” in mind are, in my opinion, the most likely to actually own the house at the end.
Buyers can make their offers less risky to the seller – i.e, less contingent on third-party assessments – by minimizing those contingencies.
They can offer a “cash” deal, meaning, they don’t need to secure a mortgage in order to close. Or they may add appraisal or inspection language into the contract that, in essence, is saying: “Even if the bank thinks the house is worth less than I offered for it, I will proceed with the contract and not seek to renegotiate the price.” Or: “It’s okay if the house has some problems that were not evident when I toured. I’ll take on the burden of all that and still pay you what we agreed upon.”
However, in order to really secure the deal, the buyer may need to do more.
GET EVERYONE ON BOARD
I’ve seen many deals fall apart when a buyer’s attorney crosses out all the carefully negotiated aspects of the offer simply because the buyer did not communicate to their attorney that these were intentional concessions. If the seller had received multiple offers on their property, they may look at the contract and say, “Sorry. Deal’s off. I’m moving to the next buyer in line.”
This can be a devastating moment for a buyer who has just spent weeks – or months – looking for, finding, and attempting to purchase a home. Besides being closed out of the home they had their heart set on, they now need to start all over.
The truth is, the vast majority of homes do appraise for the mortgage amount. And most often a deal is still worthwhile even if the buyer takes on the cost of repairs.
A GOOD AGENT HELPS MAKE GOOD DEALS
I’m not suggesting going into a house deal ready to give away the store. But a good agent can provide a lot of support in decoding these aspects of a negotiation as well as a variety of options in structuring an offer so you are both protected and making an offer that is low risk for the seller. These are conversations worth having while you’re looking for a house rather than during that stressful period of bidding and trying to make sound decisions in an instant.