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You offer $198,000 for a house
that has an asking price of $210,000. The seller comes back
and says you can have the house for $205,000. What do you
do?
Much of what you need to know you should already have found
out, before your initial offer. There are, though, a few things
to keep in mind at this new stage.
The Offer Is Contingent
Make sure that your offer is contingent on two items: 1) You're
able to obtain adequate financing (if you haven't done so
already), and 2) you can pull out if the property doesn't
pass muster with your inspector and you and the owner can't
come to terms about how to fix the problem.
Make a Serious Earnest Money Deposit
The earnest money deposit is a check that you'll give your
agent to indicate that you're serious about buying the house.
The check will apply toward the sales price if the deal goes
through; if not, you get it back and you can tear it up. Ask
your agent what's normally given -- it may be something like
$3,000 -- and then raise that amount as much as you feel comfortable.
It can be as much as 10% of the asking price of the house,
or even more. It's up to you.
If you're serious about wanting the house, the seller and
the seller's agent may be impressed with a substantial sum.
It says that you're interested in the house and that you very
likely won't run into problems in obtaining the financing.
It's kind of like pulling a fat wad of bills from your pocket
and laying them out on the table. You want to see those cash
registers go "Ka-ching! Ka-ching!" in the seller's
eyes. Motivate him. Make him unwilling to see that money go
away.
Set a Time Limit
You can specify to your agent that the offer you've made is
good for 24 hours. This lets the seller know that it's serious,
and that you don't want this to drag on indefinitely. (Assuming
that you're using an agent, your agent will be communicating
with the seller's agent.) It also motivates the seller's agent
to get in touch with the owner right away. This doesn't mean
that they must accept the offer within 24 hours; it means
that the ball will be back in your court within 24 hours (assuming
that they don't reject the offer outright). It's smart from
a psychological standpoint: There's nothing as wearying as
not knowing when you'll get an answer, if ever.
Use Time to Your Advantage
If you can possibly find out anything about the owner's time
schedule, do so. This was something you should already have
tried to do, of course, but it may come up again. Perhaps
the sellers are in a hurry because they're moving across country
and have already set a move date. If they come forward and
say that they'll accept your offer, but only if closing happens
in 30 days, you can work with that. ("We'll pay $204,000
but we need to close in 90 days; if you want us to close in
30, we'll give you $201,500.")
Remember Not to Fall In Love With the House
If you find yourself in a state of high anxiety, step back.
This may seem like your dream house, but there are going to
be others. Really. Your agent should help you with this --
if she feels that they're just asking too much, and that they
ought to be coming down, she's probably right. There are many
houses in which you can be happy, so stand firm when you've
decided that you've reached your upper limit.
Assuming that your offer is accepted, you now have to get
that home inspected.counteroffer, you're now negotiating!
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