Getting Your Offer Accepted ~ No Concessions to the seller - Write an Offer with the Best Price (Part 5 in a Series)
This series is emphasizing the methods used to get your real estate offer accepted in a strong seller's market. Currently the Denver Real Estate market has a shortage of inventory and an excess of buyers wanting to take advantage of this low interest rates. Often buyers are finding they aren't the only one interested in purchasing a property and have to bid against other buyers to be the Winning One.
The best price may be the main issue, but really the seller looks at their "bottom line." What a seller nets after all is said and done is actually more important than the price.
The Bottom Line is the Final Amount the Seller Receives
To give you an example, a seller can get an offer that is $5000 over his price, but there might be a clause in the contract that requires the seller to pay the buyer's closing costs of $10,000. The net to the seller would actually be $5000 LESS than full price.
Concessions paid by the seller are not unusual to see written into a contract, but when the real estate market is tight, with a shortage of inventory and an excess of buyers, asking for a concession is going to be detrimental to you being the One Winner of getting that house.
If you absolutely have to have the concession, write it in but be sure you make the seller get at least his asking price or more (assuming the house will appraise for that value).
Type of Loans Can Effect the Seller's Bottom Line
Another thing to think about is the closing date. If a seller has an FHA loan, those mortgage payments are not prorated for the closing date. They are prorated by the month. This means if you close at the beginning of the month the seller will be making a house payment for that month, but not living in the house! If you move that closing date to the end of the month, the seller can SAVE an entire month's mortgage payment. This action doesn't cost the buyer a dime! Obviously it's a strong plus for you to consider when preparing your offer.
Buyer Concessions have been very popular in a Buyer's Market they work, because the Seller is in a position to have to play or not sell their house. Now we are in a Seller's Market and the ball is in the Seller's court! Buyers need to play by the Seller's Rules!
Preparing a contract to be the Winning One can be a combination of many things, there is no one formula that fits all sizes. Knowing what the seller needs and what the buyer can give is helpful in creating a strategy.
Hiring an Experienced Buyer's Agent Can Help You Bid Be the Winning One!
If you are a home buyer in the Metro Denver Real Estate market and ready to begin your search now or in the near future, give me a call. I can assist you in being the One winner!