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When buying Salt Lake City homes and condos, it makes sense to hire an experienced Salt Lake City Realtor to represents you. If you choose wisely, you have much to gain!
An experienced Salt Lake City Realtor like me, negotiates many transactions and uses his experience to your advantage. Here are some examples of a few types of situations I've experienced and ways you might negotiate them.
Keep in mind that how you handle negotiation differs in a Buyer's Market and a Seller's Market and that because there is a Seller involved, that is also negotiating, you can’t always get exactly what you want. But you can sure try!
Salt Lake City home or condo that was Just Listed and is Overpriced:
In this scenario, it may be difficult to negotiate a fair deal right away depending on the Seller's motivation and whether it's a Buyer's Market or a Seller's Market. If the Seller's Realtor recommended the price, it's even tougher to negotiate because both Seller’s Realtor and Seller believe that the property is priced right. Have your Salt Lake City Realtor ask the Seller's Realtor if the Seller is flexible.
One approach here could be to write an offer at the price you want and make all the other terms of the offer strong. There are many parts of an offer beyond price. Know what the home is worth and what you’re willing to pay for it if you do make an offer and set limits. If the Seller is not reasonable and you’re not willing to walk away, you could end up in a dead end deal if the home will not appraise for an amount equal to or greater than the purchase price.
Overpriced home that has been on the market for a month or more:
This situation can be a little easier depending on how long it’s been listed and how far off the price is. By now, most Sellers and their Realtors know the property is overpriced and the Seller might not be feeling as confident about their original price. Many Sellers will do a price reduction to attract more buyers at this point and may become more flexible if they can afford to be and really want to sell their Salt Lake City home.
Make your offer based on what you believe the value to be and again, know your limit. Remember that the home has to appraise for an amount equal to or greater than the purchase price in order for the lender to make the loan.
Salt Lake City homes or condos listed at a fair price:
In a Seller's market, buy it if you like it and negotiate a fair deal for yourself.
In a Buyer's market, you might be able to negotiate a little better deal depending on many factors. Here a few things to consider:
• How long has the property been on the market? Typically, the longer it has been on the market, the more likely that the Seller is motivated to sell it, especially if they have been doing consistent price reductions.
• Has the Seller reduced the Price? How often and how far has the price been reduced? Has the Seller turned down any other offers? Your Salt Lake City Realtor may be able to find this out. Consistent price reductions indicate the Seller needs to get this Salt Lake City home sold. At this point they are probably reasonable or getting there.
• Are there any big negatives that you don't mind? Like a busy street, obsolete floor plan, small yard, lack of curb appeal, needs work. You may be able to get a better deal and create a little sweat equity if you don’t mind these issues.
• How many other similar properties are on the market? If there are a lot of Salt Lake City homes for sale in the area and price range you are looking in, it’s much more likely that you can find a motivated seller that will give you a good deal.
Salt Lake City homes and condos just listed below market value:
This home is usually hard to find, especially if you are looking for your dream home and not just a good deal. Most of the time, Salt Lake City homes and condos that come on the market priced below market value, will sell fast!
Pricing below market value is usually done intentionally. The Seller’s Realtor and Seller priced the home to sell quickly in hopes of attracting multiple offers and possibly creating a bidding war. You see this scenario a lot with financially distressed properties like short sales and foreclosures.
Sometimes a home is under priced by accident by an inexperienced Realtor that didn't understand the real value of that particular piece of Salt Lake City real estate.
Whether the price was done by accident or on purpose, if you want this home, throwing out a low-ball offer will probably allow someone more reasonable to buy it unless you’re very quick and very lucky.
If you really want to buy this underpriced home and you know there are already or could be multiple offers on it, be reasonable, act fast and keep track of it until you know the outcome of your offer. Also, determine how much the Salt Lake City home or condo is worth in advance of writing the offer. If the home is worth $25,000 more than the asking price, it’s still a good deal if you pay less than $25,000 more than asking price.
Salt Lake City Homes & Condos: The Bidding War
In a situation where more than one bid is coming in on a property, you may have to pay more than asking price to get it. First, have your Salt Lake City Realtor figure out the home’s actual value. This is important for a couple reasons. You don't want to overpay and the property has to appraise for what you are paying in order to get a loan on it.
If you really love the home, put together a great offer from the beginning. Chances are the Seller will accept or negotiate with whoever has the best offer from the beginning although there are many ways the Seller can respond in this situation. A remember that negotiation is more than just price, but price is a big part of it.
Negotiation for Salt Lake City Real Estate is more than just price:
That's right, price is very important, but the Seller may have other things that are important to them:
• Buyer's Financial Strength: Is the Buyer Pre-approved for the loan?
• Buyer's Terms of financing: Are the terms straightforward or is the Buyer trying to do something creative? Creative financing might create uncertainty with the Seller and their Realtor which could weaken the offer.
• Down Payment: The more you can put down the stronger you appear to the Seller.
• Timing: How soon will you close and how quickly are contingencies lifted for inspections, appraisal and loan making your earnest money non-refundable.
• Earnest money: The earnest money is the money that the Buyer deposits once the contract is accepted and more is generally better.
• Possession: How soon after the closing must the Seller be out?
• Do you have a property to Sell? If you do, is the property on the market? Is it priced to sell? Do you already have a Buyer under contract on it? When will it close? What about the other competing offers, do they have a home to sell?
Other things to Consider:
• Buying Salt Lake City real estate is probably the biggest financial purchase you'll ever make. It’s also an emotional thing for most Salt Lake City home buyers. That’s why we look at a lot of homes to find the one. Remember though, if the Seller won’t give you reasonable terms, you may have to walk away.
• Determine the value before you bid. Also, hire a professional Realtor to represent you. The Seller pays the Buyer’s Realtor commission, you might as well be represented, just make sure you choose wisely.
• Get pre-approved for your mortgage before you go out to look at Salt Lake City homes. There is no point of spending any time looking until you know you can afford it. Also, being pre-approved for a mortgage in advance of making an offer allows you to be in a stronger position because the Seller wants to know you can perform.
• Just throwing out low-ball offers usually puts the Seller on the defensive and most of the time results in a rejected offer or a firm counteroffer. For those looking for a good deal a better strategy might be too look for Salt Lake City homes that are priced below market value to begin with or find ones that have upside potential.
• It is important to know if it's a Buyer's Market or a Seller's Market. If every home that hits the market sells quickly, it's a Seller's market. If inventory of homes is high and homes are selling slowly, it's a Buyer's market. Usually it varies depending on the price range, type of home and location. This will affect your negotiation strategy.
I can assist you in getting pre-approved for a mortgage. This is a logical first step because knowing how much you can afford will keep your search for a home realistic and within budget.
Get Pre-approved for a Mortgage
My goal is simple, to have fun helping people get the home they want!
Because of you and my other valued clients I have the opportunity to do
what I love to do, help people in Salt Lake buy & sell homes & condos.
Contact SLCHomeBuyer.com and Kevin Coyle
If your plan is to move from one home to another, just putting your home on the market isn’t enough. Your home will need to be ready to show and you’ll need a strategy to accomplish the sale and purchase of another home in a reasonable time frame.
With 10 years selling homes in metro Salt Lake and 20 years in the real estate business, I have many strategies and an in depth understanding of what it takes to help you sell and buy another home. Call or email me if you’d like to take advantage of this opportunity!
Contact SLCHomeBuyer and Kevin Coyle
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