“The Art of Offering Less” – Buyers in Kitsap County WA
April 26th, 2009 by Rich JacobsonJust about everyone enjoys finding a bargain. My kids love shopping at the local Value Village over in East Bremerton WA. The last time I was there with my son, Luke, I found a really nice leather dress belt in mint condition for only $2.99 that normally retails for around $50!
There is this tendency when the market softens and slows down for Buyers to expect greater bargaining leverage when it comes to home sales prices.
Typically, when a market shift takes place that favors the Buyer (commonly referred to as a ‘Buyer’s Market), there is high level of inventory of homes available for purchase. At the same time, as ‘Days on Market’ increase (the number of days on average that it takes for a house to sell/close), Sellers begin to reduce or discount their listing price. Add to that the number of recent short sales and foreclosures that have occurred due to our current economic conditions, and you have the potential for finding some really excellent bargains for today’s Buyers.
However, regardless of how current market dynamics favor Buyers, one should never assume that every Seller is equally desperate to make pricing concessions. Each property must be evaluated on its own unique merits. The basic questions Buyers need to ask are:
1. How long has the home been on the market?
2. Is the house priced aggressively, according to current market value?
3. What have comparable homes in the immediate area sold for in the past 1 to 3 months?
The answers to these questions can help to dictate whether or not a lower price offer is reasonable or realistic. If the home has been on the market for any length of time without a price reduction or without much showing activity, chances are the Sellers might be more motivated in making a concession. If the home wasn’t priced right at the start, accordingly market value, then the Sellers might be coming to the point where they realize an adjustment might be necessary. A brief market analysis should be able to determine if the home is priced correctly.
In the event that a Buyer decides to offer less than the asking price, there are definitely some strategies you can employ that will help to improve your chances for success.
The offer price is just one element to a contract offer, albeit the most predominant. The key to being successful in offering less than asking price is to strengthen all of the other elements of the offer.
We’ll cover those other elements in the next installment, so stay tuned!
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Rich Jacobson is a licensed real estate professional providing knowledgeable empowerment and relentless representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLife.com and Crabbing in the Hood.
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Tags: Buyers, hood canal wa real estate, making an offer, seabeck wa real estate, Silverdale WA Real Estate
Hi Rich…I immediately recognized the artistry of Marti. I really like the look of the whole site.
Some buyers believe that no matter how much the seller has come down there is still a long, long way to go. Sometimes there is not. That is where the agent really has to do their work and that is what we get paid to do.
Kate
Rich: It’s hitting the market late this week, open house on Saturday. Stay tuned!!! =)
Traci: Good luck with the sale of your home. Sounds like you’re ahead of the game. What’s the MLS#, maybe I have a buyer for it?
Hey, Jim! Excellent point. I was actually going to incorporate that into my next post. But you’re right, the assessed value that you guys work so hard to be accurate is quickly becoming much closer to market value.
Thanks for this write-up, Rich. And, it’s so nice to see our assessor out here in the mix of market news too. Thanks for all you do, Jim.
I’m just a ‘lil’ ol’ tax payer who likes to keep up on the housing market. However, I did branch out recently and upgrade to a new home and will be putting my Ridgetop home on the market this week or next. I am anxious to see what type of response we’ll get. We’ve really cleaned and dressed it up and plan on pricing aggressively.
Cheers.
I would add a fourth evaluation point to your list. How does the asking price compare to the property tax assessed value? Most sales we are seeing right now are very close to the AV.
Hi Rich…Too many buyers feel that no amount is too low to offer and that every seller is desperate to part with their property. Makes for some very protracted negotiations.
“The key to being successful in offering less than asking price is to strengthen all of the other elements of the offer.”
I use this strategy and am looking forward to reading your post about it. Flexible closing date, increased EMD, really strong letter of pre approval, verification of funds. I haven’t used the idea I heard on AR of the buyer writing a letter to the seller, but think that is a good one for some cases.
Nice blog, Rich, first time I have been here.
Elizabeth: Thanks for stoppin’ by SBB. Everything you SEE here, graphic-wise, is the talented work of Buckwheat aka Mark Flanders, my blogging co-hort. I’ll finish up this series later this week! Take care!
Rich, Amen, amen and AMEN! What many buyers don’t understand is what really is driving the price of a home. While our market is “fairly” strong in Huntsville, many buyers believe they can low-ball a home and get offended when the seller has a knee jerk reaction and barely counters. I have really started to educate my buyers more than ever about the art of making an offer.
Hope you are doing well! Looking forward to the reading more from this series
By the way, I just love your artwork on your header…who did that for you? It’s great!