Most homebuyers want to get a great deal on a house. The trouble is that home sellers want to make the most money on their properties. While the real estate market itself will have a big impact on whether the seller accepts your low offer, there are things you can do to improve the odds he or she will. Here are three tips for getting a seller to accept a bid that's significantly less than the asking price.
Appeal to Their Needs
People sell homes for a variety of reasons, such as needing to upgrade to a larger space because of an expanding family or relocating for work reasons. Understanding why the homeowner is selling can help you craft an offer that meets specific needs they may not get with other potential buyers.
For example, if the homeowner is selling the house because he or she is relocating to take care of an ailing parent, the person may be looking to close quickly. You could get the seller to agree to a lower price if you reduce the number of or eliminate completely the contingencies in your offer, such as offering cash for the home instead of making the sale dependent on bank financing.
You can learn a lot about the seller by talking to both your real estate agent and the seller's real estate agent. Asking a few well-phrased questions (e.g., "What are your future plans?") can also get the seller to divulge more information about his or her needs and wants. Use this information to position yourself ahead of the competition.
Make the Offer Based on the Home's Value
It's not unusual for sellers to set the price of their house at more than the home's worth to provide themselves some room for negotiation. This is why you should base your offer on the home's market value rather than the list price. Whether this will result in the seller accepting your offer, though, depends on the market. You have a better chance of getting the homeowner to entertain your low offer if the market is slow or if demand for property in the area is low than if the property is located in a sought-after neighborhood.
You can get an idea of a home's true market value by looking at recent sales in the area. Your real estate agent can provide you with this information. However, several online sites that specialize in real estate listings will also usually provide information about how much a buyer paid for a neighboring home. Including a market analysis with your offer may get the seller to settle on the lower price.
Ask for Concessions
Sometimes getting the owner to take your low-ball offer will be impossible. Therefore, you can lower the home's cost in a roundabout way by asking for concessions that will save you money in other ways. For example, a common concession is to ask the seller to contribute to closing costs. It can cost as much as $2,655 to close on a $200,000 home, depending on where the house is. Getting the seller to pay even half of that amount may be enough to pay your mortgage for one month.
Other concessions you may consider asking for include repairs, warranties for major appliances, landscaping services, and leaving behind furniture (e.g. sofas, beds) so you don't have to purchase that stuff when it's time to move in. Your real estate agent can suggest other types of concessions you can ask for that may help you save cash.
For more information about crafting an offer that gets accepted or help with finding the right home for you, contact a real estate agent.