Will the Seller Take Less? Wow! Is this a loaded question or what?
When I am looking at homes with buyers, I occasionally get asked this question. I think a few reasons behind this question are; the buyer may want a deal, the buyer feels that it is overpriced, the buyer may feel that there are too many repairs needed and want to have those funds to do the work/updates.
In any case, the answer most likely is.... It all depends!
1. What Type of Market are We In?
Is it a Seller's Market? A Seller's Market is to the advantage of the seller. There are usually not enough homes on the market for buyers, and these homes are usually selling very quickly. As a buyer, you will probably have a lot of buyer competition, and it is probably not a good time to offer less. There may even be multiple offers or buyers bidding OVER the asking price. Going in with a low offer does not really compete. In this market, you will usually want to present your best offer because you might not get a chance to change it afterwards. A seller does not have to offer a highest and best offer with multiple offer situations. They can just choose an offer that is best for them. This only gives you once change to make your best offer. Once an offer is accepted, the buyer and seller are in a contract and cannot sign other offers.
On the other hand, if you are in a Buyer's Market, there are usually a lot of homes listed for sale. The buyer usually has more control and negotiating power if they are a strong buyer. A strong buyer is usually someone who has a pre-approval letter and possibly stronger with a pre-qualification letter, a larger down payment and not in need of seller concessions for help with closing costs. In this situation, you may have an opportunity to "test the waters" with a lower offer.
2. What is the Seller's Situation?
The seller may have a current mortgage still on the property. Have they owned it for awhile, or did they recently buy it? Do they have a home equity line or second mortgage tied to the property? Are they going through a divorce and need to split the proceeds? Are they in a short sale situation? Is it an estate sale where they may have to prove taking a "fair" offer to settle the estate? Bottom line is they may not be in a situation where they CAN take a lower offer.
3. Why Should They?.png)
When a seller lists their home for sale, the listing agent usually does a market analysis to find a competitive home value. This is the price where the seller is expecting to sell. Why should they sell their home for less than market value? Most sellers want to get the most for their home. If they wanted to get less, or they need to sell it quickly, they would probably list it for less. If you were the seller...... would YOU take a lower offer??? If the sellers are listing it too high for market value, the listing agent is doing a disservice in my opinion. They are leading the seller on. Also, the seller will probably not be willing to negotiate much anyways if they feel that their list price meets the value.
4. Buyer's Agent
This is a value of having a buyer's agent on your side. Your buyer's agent can look at the same comparable properties that the listing agent is using and more than likely an appraiser as well. If your agent doesn't feel that the seller will sell at market value, it may not be worth your time offering on the property, unless you want to bring the additional money to closing. Why waste time and money on a home inspection and appraisal if the sellers won't or can't compromise if the value is not there? Of course, you can always take a chance with the offer and see what happens. Sometimes a seller hearing their market value from an appraiser does the trick. They are already committed to the deal. Anything can happen from offer to closing.
Happy House Hunting! Being an educated buyer makes things a little easier. If you need assistance with your home buying or home selling, I'd be happy to help! Kelly Dix, 586-899-6666 or kellydixrealestate@gmail.com.