There are powerful emotions at play in the purchase of a home. A Buyer needs to feel passionate. And a seller must really want to make a change. In an offer situation there is a lot of emotional energy and real estate professinals harness that energy to negotiate the best deal for their client. It is at the “tabling of an offer” that a lot of money can disappear from a Sellers asking price. A good real estate agent can bolster a Sellers position when faced with a strong Buyer agent. And conversely, a strong salesperson for the Buyer can undermine a Seller’s price.
An offer to purchase is a binding contract ( see related blog post on parts to an offer) to perform several actions in return for goods and services from the Seller. Clearly, if the offer is for the asking price and there are no unexpected chattels included in the offer it will be accepted. Hurray! The price would have to be attractive or the motivation to purchase would have to be high to offer full price. A well priced home sells faster and for higher than does an overpriced home!
Let’s say there are a number of renovations and maintenance concerns for the Buyer. In this situation a lower price might be considered to make a balance between the asking price and the Buyer’s future expenditures. In practice the total value of the liabilities might be subtracted from the asking price. This might could make the offer appear insincere and unacceptably low to the seller. Consider at this point if the house is over priced or if there is a need for more information about the community that would support the price. Perhaps the Buyer is poorly informed.
It might be wise to consider a range of acceptability for both the buyer and seller and strategically place the offer price at the lower limit of possibility for the seller, disregard any defects and maintenance concerns for the moment. Sellers frequently don’t perceive problems their home. Try to arrive at an acceptable price for all; a kind of win win. If there are major maintenance expenses for the Buyer the building inspection should reveal them and post inspection is a good time to revisit the accepted price. So there is time for the Buyer and Seller to renegotiate.
I feel it is wiser to make a fair offer and purchase at a fair market value than it is to “low ball it” and frustrate the transaction. When Buyers loose out on a house they frequently pay more for the house they finally buy.