[youtube_video] 9wGJWvlPK-g [/youtube_video]
Video Transcription
Aloha, George Krischke with Honolulu HI 5 (company now called Hawaii Living). Today we’re going to talk about real estate offer strategies. Recently I got an email from a client of ours. We represented a buyer that wanted to purchase a house and successfully did so, and the email reads, question, “Do we put in an offer for our top limit in this sellers market or put in a lower offer and then try to negotiate up?” The simple answer is you should only submit an offer that you are comfortable with, so don’t pay more than what you can, certainly not. We’re here to help you get the best deal possible. We pride ourselves in going the extra mile and doing detailed research on what the circumstances are and what could possibly yield the highest success rate for your purchase.
I’m going to simplify it. There’s basically two broad approaches, and this is the simple summary.
The first approach is: “Go in strong.” Give it the best shot you’ve got if you really like the property, and you hope that the seller will accept this in. The strategy is to tie up the property successfully and go in strong. We always hope that the seller will sell at the lower price than what the seller is trying to aim at or lower than the asking price. Go in strong is the strategy to tie up the property and get it if you really want it. Go in strong depends on the market. It could be full price. It could be less than full price, or sometimes it may have to be above full price. There’s many different situations and circumstances that need to be researched and looked at carefully.
The second approach is: “Go in at a level where you want to test the seller’s response.” This works fine if nobody else is competing on that property. Keep in mind if you go in too low the seller sometimes counters too high or at full price. A seller may not take your offer seriously. This strategy works if you’re okay with the possibility that somebody else could come in and snatch the property. Both approaches need to be considered and the final approach could be somewhere in the middle. You have to decide that. The final decision is with you, but we’re here to counsel you on that.
There’s pros and cons with both approaches, and it really depends on you comfort level and how much you desire the property. Success may depend on the presentation, or on the quality of communication that the buyer’s agent will do on your behalf, or the seller’s agent. A lot of agents underestimate the power of that. Sometimes a cover letter is helpful. A prequal letter is always good, for proof of funds and so on. A cover letter might explain the circumstances and some other perks to increase the chances for you to get the property. That is the tip of the day.
Thanks for watching. ~Aloha.