How Do I Convince a Seller to Accept My Offer?
Accepting offers and getting them accepted is often as artful as it is about math. Although no one-trick is right for every situation, it’s a good idea to have a few tools in order to build more projects. How do I convince a seller to accept my offer?
The early bird always wins, as they say. It’s not always easy to get a “yes,” but sometimes it is simple to be the first one to offer on a property. Set up automatic alerts with your agent so that you are notified of new properties when they come on the market. Then, don’t hesitate! Make an offer and run the numbers! Fear shouldn’t slow you down.
Instead of playing games with the seller offer your highest offer straight away. You can say no to sellers who try to counter you and make your offer higher. It’s okay to offer $90,000. If you are able to prove the numbers, it is better to accept $90,000.
Remember that if you offer a piece of property for sale, there will always be someone at the other end making the final decision. Even if the bank REO is being offered, If you are looking to have your offer accepted, make sure that you get to know the person who will accept it. This is how I believe it’s best to go about it: Include a letter along with your offer.
It doesn’t need to be formal. Just a short message to let the seller know you are there and your plans for the house. This strategy works almost every single time that I make an offer. It is also important to attach a photograph with your letter. It lets the seller know you’re not “some investor”. This shows that you are real! For added benefits, include your family members in the photograph! Related: The Trouble with the 70% Rule for Calculating Your Maximum Allowable Offer
It is important to find out the true motivation of the seller. Do they want the highest possible price? Do they need a quick closing? Yesterday, I was able to walk through a house together with someone who had called me from my website “I buy homes”. I discovered that his grandmother owns the property and cannot afford to pay the taxes or insurance. The money will be used to purchase a car for her, as well as a vehicle that she can afford. The main motivator of this person was to solve a problem fast, not get the most expensive.
My friend is a real estate agent. He once said to me that if I make an offer and it does not make me blush, then I was offering too much! To put it another way, you should feel uncomfortable when you are trying to negotiate a great deal. Get out there and make offers.
You can offer cash for a property if you have the funds. This can make it more attractive to potential buyers, regardless of whether they offer less. Because they are confident that cash buyers will be there to pay, the chance of the buyer not following through drops dramatically.
You can remove any financing condition from an offer, even if it isn’t possible to pay all the cash. You could also lose your earnest deposit if the financing condition is removed. Although this is an inherent risk, if you’re confident about taking the risk it could help to grease your offer and get you to “yes”.
Sellers know their property requires a lot of work. Sellers are often nervous about people wanting to inspect the property. Sellers fear they might accept an offer and, a week later find out that the buyer has changed their mind.
If you are looking to increase your chances of acceptance, do not include an inspection condition. This will raise your risk because you won’t be able to withdraw your earnest money deposit if there is something you didn’t expect. Removing the inspection condition can make an offer more attractive.
Sellers can’t wait for their property to be sold once they decide to do so. You can make your offer more attractive by requesting a quicker closing date. If you’re using a bank loan to purchase a home, this might be your only option. Banks take between 30-45 days to complete all paperwork. If you’re using hard, private or cash money, it is best to set a fast closing date.
The seller will evaluate your offer and compare it with their asking price when you make an offer. They will automatically do their math and tell you that $150,000 is too much for a house worth $190,000. Consider submitting more than one offer for a property. This will allow the seller to compare the offers and not just the asking price. One offer might be $150,000 cash and one for $165,000 financing. It will likely take 60 days for the property to close. Now the seller wants to determine which offer is best and ignores their asking price. Although this “price anchoring strategy” is widely used across many industries, it is rarely employed in real estate. This is a good thing because it is very effective. ).
Offer a higher earnest money deposit to show the seller that you’re serious. While a 1% to 2% deposit is standard, you might consider offering more. This will show that you care about the seller. If you need to withdraw, make sure that you have the necessary contingencies. Some investors offer cash without any contingencies and make their earnest money exactly the same as the purchase price. They guarantee that the sale is made. This is an incredibly powerful offer.
Include a copy of your pre-approval letter if you plan to use bank financing. While it is one thing for you to inform the seller that your offer qualifies, they should also be able to hold the preapproval letter so that they can verify that the transaction will proceed.
A property can have more than one bidder. An escalation clause may be added to an offer. This clause basically states that if someone bids more than mine, the offer will be increased to $X. You might make an offer of $100,000 for a property, but add an escalation clause saying that you’ll pay $500 more than any other offers. This could be up to $110,000. If someone offers $106,000, then your offer will increase to $106,500. An escalation clause is dangerous because it can tell the seller how much you are willing to pay.
You should only use an escalation clause when you are certain that there will be multiple offers. Never increase your maximum price beyond what you can afford.
It is easy for houses to accumulate lots of junk over the years. Selling this property can prove very difficult. If you’re considering selling a house with a lot of junk, offer to clear the space for the seller. To tie in to one of my tips, make two offers to the seller: one with junk removal, and one without.
It can be costly to sell a house. If you feel the numbers are right, offer to cover some or all the closing costs.
Remember this, even though your offer was rejected, it doesn’t necessarily mean that you won’t make another offer soon. One time, I offered $60,000 for an $80,000 property and it was turned down. It was a deal I couldn’t accept. The seller reduced the price to $59,000 after the property had been on the market for three months more. At that time, I made an offer of $40,000 and was accepted. This is $20,000 more than what I originally proposed to pay.
