My strategy for winning offers has the following pieces, in some form, every time, with every buyer. It is dependent upon a trust-based relationship with the REALTORÂ® representing you, and getting all of your "ducks in a row" before making an offer.
1.Start with a pre-approval (not pre-qualification) from TWO lenders: the one who you have been using all along, and a second lender. The first pre-approval is obtained prior to beginning the property search, and is used to pinpoint how much you can afford to spend on your purchase. The second lender should be EITHER the bank/seller on an REO property, or an INSTITUTIONAL LENDER (such as B of A or Wells) on a retail sale. Its purpose ids to satisfy the seller/ bank that you are legitimate in their eyes, or to show the retail seller that you are solid gold. Be sure each pre-approval letter lists your name, the property address, and the purchase dollar amount. Update the information with each offer/ counter offer, as it changes.
2.On an REO property, ask the listing agent if a internal bank appraisal has been done on the property, and if so, do they know the value.
3.On either type of property, I always prepare a thorough Market Evaluation (CMA) with all of the most recent comparable sales, and help my buyers set a value on the property, both so they will know what they will bid, and so they will have a good sense of what the property will appraise for when they obtain their new loan.
4.BEFORE beginning negotiations, set a maximum that you will pay for the property. Beyond that value, be prepared to walk away, without looking back. Some properties are not meant to be, and a buyer needs to feel in control of the process. There may always be someone willing to pay more, but that should not affect your decision. This is, after all, a business transaction, and it should make good business sense for your family. The moment it doesn't, WALK AWAY. Another property will come along.
5. Buyers should always write a letter to the home seller. Your real estate agent should always write a separate letter to the listing agent highlighting your purchase offer.
6. Write your cleanest and best offer (or counter offer). Your pre-approval told you how much you can afford. Your CMA told you how much the property is worth in today's market. You have set the maximum value you are willing to pay. Now select terms that protect you, but are as attractive to a would-be seller as well. You can never compete with an all cash buyer or investor, so realizing that frees you up to write YOUR best offer.
7. Never, ever use round numbers in your price. Everyone else does. It makes your offer more mysterious to the seller when they see an uneven number, and banks assume you have some formula for assessing value. When it comes to counters, you may win by that extra $1682 you tacked on at the end!
8. If someone else gets the property, the hardest part, as I mentioned above, is to walk away without looking back. Know that you did your best. You and your agent made a strategy that was appropriate for you, and someone else got the property. Take comfort in the planning you did, and the knowledge you have about your situation, and know that something else will come along. Count this one as preparation for the next offer, a rehearsal of sorts, that will season you and make you a more savvy purchaser.
Best of luck,
The Bremner Group at Coldwell Banker
REALTOR, 00588885, ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
Accredited Buyer Representative|Certified Distressed Property Expert |Pre-Foreclosure Specialist Certified