The more a Buyer knows about the House and Seller, the smoother the negotiation will be.
Step 5 is all about doing appropriate analysis and due diligence to properly equip the House Buyer with all the information needed to make an informed offer and build a strategy for the ensuing negotiation.
When we do this right, negotiations are easier, and house Buyers tend to get more of their terms accepted by the Seller.
This analysis really begins at the first visit as the Buyer and the REALTOR view the property and compare it to others they’ve seen in the market. Believe it or not, the most informed “Value Expert” is the BUYER who has walked through several houses.
The REALTOR is there to help the Buyer know when it’s the “RIGHT” house and often plays the “Devil’s Advocate” to remind the Buyer of certain “MUSTS” which may not be present . . . Sometimes “CUTE” can trump common sense for a Buyer.
When it’s RIGHT, it’s RIGHT!
Now it’s time for some real analysis. REALTORS look at Prior sales in the immediate area and compare them to the “Subject Property” just as an Appraiser will do during the Loan Approval Process. Together with the Buyer, all determine the “Bottom Line Worth” of THAT house NOW. In other words: “What’s the most this Buyer would be willing to pay for this house?”
Analysis helps prevent “Impulse Buying” – a Veritable “Buyer’s Remorse Vaccine”
We also also don our Detective hats and do some diligence around trying to determine the SELLER’s scenario. What can we learn about the Seller that will help us negotiate better terms for the Buyer?
- Why is the Seller Selling?
- Does the Seller have equity? (Or are they up-side down)
- When did this Seller buy the house and for how much?
- What improvements did the seller complete while living there?
- Are there any neighborhood factors to consider? (Future Development Plans)
- Are there any concerns relating to adjacent properties?
Sometimes, a single call to a “Loose Lipped Listing agent can answer ALL of these questions.
Once we feel like we have good grip on Value and Seller’s Scenario, we build the offer and the Negotiation Strategy.
Building the Offer includes Considering Contingencies – Financial, Property Condition Inspections, Appraisal, Sale of Home, oe anything else that could squirrel the deal later if not addressed up front.
Our under-lying strategy is to shift as much RISK possible from the Buyer to the Seller.
Your REALTOR is a lean mean paperwork spinning machine who will craft all of the appropriate documents with finesse.
Once the offer is complete, your agent will present it to the Seller’s agent . . . at which point we transition to:
Step 6 – The NEGOTIATION!
Tune in tomorrow for some insight on THAT very essential piece of the House Buying Process.
I’m a Strategist who takes great pleasure in working through Step 5 – Market Analysis and Detective work are the BEST 🙂