So what is the right price to start with?
That depends on a number of things, such as the risk to losing the home to another buyer, how close to market value the seller’s asking price is and what is the maximum price willing to be paid for the home. As mentioned in the previous post on this topic, there is no cardinal rule that there must be some fixed amount that a seller will negotiate from their asking price. Even though the current market in 2009 is considered a buyer’s market, whether the home search is in Iselin, New Jersey, Colonia, Woodbridge Township, Middlesex County or any other state, there are many properties on the market for sale where the listing price is at, or very near market value, and where price negotiation will not be as great as other properties on the market that are priced well above market value.
In fact, don’t be surprised to find that there are multiple offers being submitted and negotiated. This does occur, more often than most buyers imagine, and it happens when a seller prices their home to sell and sets a very attractive list price to attract buyers and sell fast.
When negotiating a real estate purchase offer, the seller wants to sell at the highest price and the buyer wants to buy at the lowest price! The reality is that a home will sell for what is worth, whether a seller is looking to get more or a buyer wants to pay less. Contract negotiation is all about getting agreement.
Often overlooked by home buyers at this point in the home buying process is the experience and value of their buyer’s agent in the contract negotiating process. In preparing to make a contract offer, a buyer needs to obtain as much information as possible, and much of that information will be provided by their buyer agent.
This is the point in time when buyers need to have trust in their agent when asking for recommendations and guidance. The truth of the matter is that this is the point in time when the buyer must know and believe that their agent’s concerns are for them, and not for themselves!
An experienced buyer’s agent should prepare, provide and review a market analysis of the home and provide the history of the listing with their client when preparing a contract offer. In addition, a buyer should also a obtain a sellers disclosure if one is available and obtain additional background information about the home, such as the sellers desired closing time frame, if any offers were previously submitted or if a contract offer is currently being negotiated. This is information buyers should have when preparing to make a contract offer. Information like this is invaluable when deciding what price to offer and how to negotiate when submitting a contract offer.
So how does a buyer start negotiating to purchase a home? That depends on the home. There are homes on the market for sale that are simply over priced, some slightly over priced, and then there are those listings that are priced to sell. There are home sellers who are pricing their home at three year ago price levels and will sell only if they get there price, there are sellers who must sell within a certain time frame and there are sellers who just have to sell.
In contract negotiations, one size does not fit all.
While there are many homes on the market, only one buyer gets to own the home in contract negotiations. A home buyer needs to decide how much they want a specific home and at what price!