The Art of Making an Offer

So you have found a property that you like. The next step is to make the offer, but there is an art to making an offer that the seller will consider and accept. Here are 6 points to keep in mind when crafting your offer.

1. Get professional advice.

What do I mean by getting professional advice? You should have:

A good real estate broker/agent
A great attorney representing you
A good home/building inspector, engineer and/or architect
A contractor you can trust
An honest and trustworthy mortgage broker

2. Get pre-approved.

Being pre-approved indicates a serious level of commitment and that you are creditworthy. If you have the proof of funds, you will show the seller that you are a strong buyer which might give you a lot of leverage when negotiating. Being a cash buyer and showing that you have all the monies in place is a no-brainer.

Be prepared to present your financial information such as W-2s, tax returns, salary and financial statements to your mortgage broker. Once they agree with your financial situation, the mortgage company will provide you with a preliminary pre-approval letter. With your authorization, your broker/agent can present your qualification to the potential seller or anyone representing him.

3. Never put down or talk negatively about the home or property in front of the owner.

Criticizing the property will not encourage the seller to want to cooperate or negotiate with you.

4. Know who you are dealing with.

Who is the seller and what is their frame of mind. Your broker will be able to give you some insights, but not everything can be shared legally. Researching the seller’s situation will put you in a better negotiating position.

5. Make your offer a real offer.

Make it real for you:

If you really want the property, pay their price.
If you want to take the middle ground, put in a realistic offer that is slightly lower than the asking price. You have a good chance that the buyer will accept, but at the very least, it gives you a little wiggle room.
If you are the risk taker and want to put in a low offer and risk losing the property to another buyer, that’s your choice. Some buyers do use this strategy.

6. Know your bottom line.

When you start talking about the price, you can forget that you’ve got to pay your mortgage and other obligations that you need to meet. Make sure you know what your price range is and the maximum amount that you can afford to pay for the property. If you can get a deal, take the deal, but know what your limit is and stick to your guns. If it doesn’t work out, you will find another property.

The art of making an offer is to keep things very transparent so that you can really negotiate. If you want the property, show the seller that you are a strong, serious, responsible, and creditworthy buyer so that they will have no doubts about accepting your offer and selling their property to you.