Simply put, buyers' market offers are composed differently than offers in a seller's market. A buyer's market exists when there are a lot of homes on the market and very few buyers. If inventory--the number of homes on the market in your neighborhood--has been rising, it's likely that the days on market have been increasing. Couple that with declining sales figures over previous months and home buyers are in an enviable position to negotiate. Here is how you can write a buyer's offer to your advantage.
1 Request E-Mail Listings & Updates
Almost all home buyers today start a home search online. However, many buyers are unaware that the data they are viewing could be dated. Many Web sites refresh every 24 hours. On other sites, agents sometimes leave expired and sold listings as active, hoping for ad calls. To avoid wasting your time, ask your agent to register your e-mail address so you can receive daily MLS changes of reduced prices and new listings. This is one way to gain access to the same data agents receive before the public receives it.
2 Tour Price Reductions
If you're like most buyers, you will want to offer less than asking price. It's just human nature. But if you plan to low-ball, you'll probably be unsuccessful at getting that type of offer accepted if the home was just listed. Instead, tour homes that have had recent price reductions or have been on the market for at least 30 days or more. These sellers are sometimes more receptive to a lower offer.
3 Obtain Comparable Sales
When you find a home you want to buy, ask your real estate agent to send you a list of similar homes in the same neighborhood over the last three to six months sorted by:
The list should contain the following specifics:
Bedrooms & Baths
4 Request Contingencies
In a buyers' market, you're in control. You can write your offer contingent upon various things such as your current property selling, or the property appraising at the agreed upon sales price and on obtaining your financing. Ask for a reasonable period to conduct inspections and to approve title, etc.
5 Ask for an Allowance or Credit
If you find the perfect home but you don't like the color or condition of the carpet, for example, ask the seller to give you a carpeting allowance in your offer. You can ask for more than it will cost to repair or replace an item to cover your "hassle" factor.
6 Renegotiate After Home Inspections
All buyers should obtain a home inspection. Most contracts give buyers the right to cancel a contract if the home inspection reveals repairs or defects that are unacceptable to a buyer. However, if the repairs are minor, you might want to renegotiate the sales price or ask for a credit against your closing costs. Caution: don't ask for a price reduction if the repairs were evident when you first saw the home or the seller might not be willing to negotiate with you.
7 Ask for an Item You Want
Did you like the sellers' dining room table? China cabinet? Fish tank? Ask for it in your offer and use it as a negotiating tool. Often this draws the sellers' thoughts away from price and directs those thoughts toward the personal property. If the listing stated the washer and dryer are not included in the sales price, ask for them. If the sellers balk, tell your agent to say, "OK, if we leave the washer & dryer, are you then ready to sign the offer?"
8 Shorten the Acceptance Period
There often is no reason to give a seller more than 24 hours to make a decision about your offer. If your agent is presenting the offer in person, she may ask for a decision upon presentation. But don't give them days to talk to Uncle Harry, their neighbour down the street or the coworker who knows everything and absolutely nothing about real estate. There are a lot more homes on the market and you deserve a fast answer.
If you're thinking of buying a home, now is the best time to get a deal. Feel free to contact me with any questions 604-306-1968.