Smart Money lists six steps to take to make a successful low-ball offer on a home as follows:
1. Understand the market
2. Pick the right real-estate agent
3. Back up your price
4. Know what you're willing to pay
5. Make a clean, easy offer
6. Be smart about a cash deal
I have to say that this is a GREAT list IMO. Much of it came in very handy while we were trying to buy a home in 2008 (we actually had an offer accepted but the inspection ultimately caused us to back out.) That said, I'd offer these comments to supplement what they say:
- Just because you know the market and make a fact-based offer/argument, don't expect the seller to see your side. He will often have reasons why his property is worth more than what comparable homes have sold for (better location, newer construction, etc.) And if he doesn't, he can simply be irrational (which many people are when it comes to selling their home) and just say "no."
- I have to second the real estate agent suggestion. Most agents play the middleman -- they want to get a deal done and thus will work to make you compromise what you really want. Our agent was like this. It's waaaaay better to get an agent that truly is your representative and is willing to work WITH you (rather than against you in some cases) to make sure the purchase is a success.
- There's a huge temptation to fall in love with a place and go over budget when you buy a home. Don't do it or it could cost you a fortune! Paying 10% extra for a candy bar is not so bad, but paying 10% extra for a house is a huge amount of money!!!
I know that several of you who read FMF are regular real estate buyers/sellers. Are there any other tips you have for the rest of us?