- Understand the Local Market Conditions: At a minimum, a CMA (Comparative Market Analysis) should be conducted which shows actual selling prices, preferably within the last six months, of “comparable” properties that surround the subject property. Try to anticipate how a licensed appraiser will view such data. If the purchase of the home will be contingent upon lender financing, remember that loan approval will be based upon the the lower of appraisal value or contract purchase price; hence the importance of appraisal considerations. Average sales price per square foot is a very important factor but be mindful that fair minded people (sellers, appraisers, etc.) will appropriately “adjust” for: condition, certain home improvements, etc. Also, many underwriters are now requiring appraisers to find at least one comparable sale within the last 30 days and a second sale within the last 90 days. Moreover, some are required to include an assessment of competing home “listings” in their analysis. With that in mind, conducting an Absorption Analysis will provide buyers with useful information (and possibly create leverage with a seller). An absorption analysis essentially determines how frequently the current inventory of comparable houses are actually selling for in today’s market. Example, if 2 “competing” houses had sold during the past month, but there were 28 houses for sale, it would take 14 months to “sell off” the existing inventory of houses (without adjusting for future homes added to the market, homes that subsequently compete with the subject due to price changes, etc.). Buyers have even more leverage if it would take 30 months to sell off an existing inventory of houses in today’s market.
- Try to Place Yourself in the Shoes of the Seller: A buyer would be wise to ask, “If I were the seller, what would I feel would be an acceptable , fair price to sell my home for?” Buyers may place different values on what a recent renovation is worth to them verses what the value is to the seller, but this approach tends to create a more reasonable mind set that generally helps in ultimately reaching a successful result; a binding sales agreement.
- Avoid Viewing Counter Offers, Personally: Oftentimes, just a brief explanation (or justification) behind the need or desire to modify an offer will go a long way in gaining acceptance. Be careful with the words you use during the negotiating process; ‘This is the best I can do at this time” has a far different meaning than “this is my final offer.” Final means “final”!
- Present the Seller with Reasons for Structuring the Offer the Way You Did: If the buyer or agent took the time to explain that their accompanying offer was $40,000 less than the list price because the HVAC needed to be replaced, carpentry work was required to fix unsafe conditions and to repair termite damage, for example, that would go a long way in helping to “sell” what otherwise may be perceived as a low ball offer.
- Be a Problem Solver: Don’t view negotiations as a win-lose proposition. Always seek out the win-win position for all parties. “Oh, so Mr. Seller, you have to have a closing date on this date due to your relocation and child’s school schedule? Well, I’ll work with you on the closing and possession date if you’ll work with me on the economic conditions I’ve proposed.”
- Years of Experience: 15
- ABR - Accredited Buyer Representative
- CRS - Certified Residential Specialist
- CSP - Certified Home Specialist
- GRI - Graduate Residential Institute
Direct: (615) 519-4040
Office: (615) 896-2733
522 Uptown Square
Murfreesboro, TN 37129