Imagine you and your buyer agent have been looking for the right home for the past few months, and now you know you've found the right one. You're excited by the possibilities of owning your next home, but you realize you need guidance on how to structure and negotiate your offer to purchase. Here are five great questions to consider before you and your agent draft your offer.
5 questions to ask before writing your offer
1) What is important to the seller?
Having your buyer agent ask the listing agent this simple, open-ended question can reveal so much about the seller's priorities. And usually, you will learn there are factors very important to the seller that have nothing to do with price. For example, the seller may prefer a specific closing date or be unwilling to accept an offer that is subject to sale. Or, the seller may be extremely motivated and open to receiving any offer at all - including one with a home sale contingency.
2) How busy is the listing?
How many showings is the listing receiving? Have any offers been submitted? And how many offers are expected in total? You won't know the answers to these questions unless your buyer agent asks. If the listing is very competitive, you and your agent should consider writing some of our 22 winning strategies into your offer (see our home buyer's blog for more info). If the listing is quiet, you won't need to include many concessions.
3) What does current MLS sales data suggest for an offer price?
Asking your buyer agent to do a quick market analysis will help you determine whether or not the list price is appropriate for the current market. If the property is over-priced, your agent can use the market analysis to justify the price in your offer.
4) How does the seasonality of the market impact your offer price?
Properties tend to sell for higher prices in the spring and summer than they do in the fall and winter. This means you may need to pay a premium when the market is at its seasonal peak. Conversely, the deals tend to be better when the market is slower.
5) What is most important to you?
Before you draft your offer to purchase it can be helpful to articulate your negotiables and your non-negotiables. What are you willing to negotiate, and what are your non-negotiables? Putting pen to paper and getting clear on your priorities will help you structure the right offer.
A note on communication style
When getting ready to draft an offer, we prefer calling the listing agent and engaging the agent in a conversation. Important details can be missed in emails and text messages, but a short conversation usually gives us all the information we need to structure a winning offer.