Negotiating an Offer

Posted on: October 12, 2007

When your Realtor® finds the right home for you, he/she will represent you and negotiate on your behalf. You will sit down and write up an offer.

At PortlandRealEstate.com we insist on presenting your offer directly to the seller. This gives us the opportunity to speak well of you, and make your case. We go over terms and make sure the seller is comfortable with the offer. Our goal is to leave the presentation with a signed offer or at the very least a counter-offer. There are times when the offer does not meet the specifications in the listing, and the seller may reject the offer outright without offering a counteroffer.

If there is strong demand for properties, a seller may not even make a counter offer, but accept one of several offers—usually the one with the highest price or most qualified buyer. We are in a transitioning market right now where the sellers have not caught up with the buyer’s perception that “inventory is high and your house is not the only one that works for me”. Even in this market rejections happen.

A counter-offer isn’t always about price. Commonly counteroffers will change title companies, closing dates, personal property included in contract, and earnest money amounts. It is difficult to know how to best structure these terms until we have some feedback from the seller. For instance, we wouldn’t know the seller’s closing timeline if they are still living in the home. Sometimes sellers are willing to take a lower sales price if they are confident you can close before their next mortgage payment; therefore these terms are equally important as the price.

As experienced Realtors®, we have a good idea how best to structure the terms of an agreement based on the how long the property has been on the market, whether it is vacant, the sales price of neighboring properties that have sold recently, and factors unique to the home. Often we talk to the listing broker and may get more information to help us decide. Even with all this information at hand, there are instances where the seller will come back with a counter to terms or price. PortlandRealEstate.com Realtors® will tell you when the offer will be presented and ask you to stay close to a phone so we walk away with a counter-offer you are comfortable with. This makes negotiation more comfortable, and you feel more in control.

Here are some tips to help you get your offer accepted in any market:

Pre-approval: Make sure you have been pre-approved, not just pre-qualified.

Strong deposit: Provide a substantial earnest money deposit. This is “good faith” money and shows the seller you are serious about purchasing the home.

Contingencies: Limit the number of contingencies; include only the ones you really need, like financing and an inspection, etc.

Just because the market is soft right now doesn’t mean sellers are overlooking any of these points. If anything, the buyer’s pre-qualification letter will be further scrutinized because of the constantly shifting sands in today’s mortgage market. Doing everything you can to convince the seller you are a qualified buyer will ensure an accepted offer and save you the disappointment of a rejected offer.

There is nothing like the feeling of an accepted offer—something close to the feeling of victory and relief. Now you can picture yourself moving into your new home. The next step is to make a formal loan application and schedule a home inspection. These are both simple processes, and not as trying as finding the perfect home.

Written by Heidi Aspinwall, Realtor® for PortlandRealEstate.com.