5 Tips for Getting The Best Offer On Your Home – In Any Market!
July 9, 2022
July 9, 2022
Let’s start with some words of wisdom.
Words of Wisdom #1.
The best offer is not necessarily the offer that a seller of a property would like to receive in theory, but the best offer that is POSSIBLE to get in any given market.
Words of Wisdom #2.
You can get a GREAT offer in any market, and you can get a lemon of an offer in any market, too! The offers depend not on the market but on your ability to attract highly motivated and sincere (“sincere” is an important word in this case) buyers.
Words of Wisdom #3
To get the best outcome of any situation, one needs to have either 1) Knowledge and experience, or 2) Genius and creativity, or 3) Dumb luck. Decide which of those three factors you plan to count on.
Now that we have established those three important facts, let’s review the tips and tricks that will allow YOU to get the best possible offer on YOUR house in any market.
TIP #1. Determine what would a GREAT offer look like in YOUR area.
This will add the “knowledge and experience” ingredient to your “best sale recipe
If you do not know what the BEST looks like, how do you plan to get it? To avoid guestimates and spitball numbers (even if those guestimate numbers make you all happy and tingly with excitement), you need at a minimum establish a “price baseline” of your neighborhood.
Let’s look at an example: the highest sold price on a nice 2005-built 3 bedroom 2 bath, 1,400 sq ft D. R. Horton house home may have been $380,000 in Scurry, TX but in Frisco, TX the highest sold price might have been $580,000.
- Should homeowners in Scurry, TX price their home based on the prices in Frisco, TX?
- What will happen if they do?
- How long might they have to wait to sell their home at $580,000 in Scurry, TX?
Start by asking some friendly realtor to show you the BEST sold homes within 05.-1 mile area of your home for the last 30-90 days. Ask to see the maximum sold price, median (or average) sold price, and lowest sold price in your neighborhood.
Out of those stats, identify 3 different pricing categories:
- premium price for this neighborhood
- average price for this neighborhood
- wholesale (investment-grade) price for this neighborhood
If after looking at those prices you decide to sell your home ABOVE the premium price level, that is fine, but knowing what those levels are will give you the ability to act with confidence and knowledge when talking to people viewing the house, or when responding to their offers.
Find a way to receive weekly updates of sold homes in the area so you could see whether the sale prices in the area are trending up or down with time, so see whether more time or more creativity might be needed to achieve a target price in the current market.
TIP 2. Select not only the ideal price but also the ideal buyer type for that price level
This will add both the “knowledge and experience” and the “creativity” ingredients to your recipe.
Some homeowners set their home prices like they are trying to pick a vacation package. It feels good, it feels right, Zillow suggested this price, someone told them about someone else who sold for that price, it makes their next home purchase easier, and so on.
But each and every real estate sale will have two parties to the transaction: the sellers and the buyers.
Because each sale is a two-way transaction, once you planned out “your side” of the transaction (your price and why you want that price), take some time to plan out the buyer part of this equation.
This is important not as a pointless mental exercise, but because if you do not know who the ideal buyer is, how will you make sure that the ideal buyers do not slip away, leaving you to deal with no-so-ideal buyers?
Start by looking at those homes that recently sold at the price that you get for your home. Find a way to find out who bought those homes (example: did a young couple with kids buy it? did an AirB&B investor buy it? did someone from out of state buy it?)
Identify a “best buyer” trend, if you can, and decide which features of your home would appeal to the ideal buyer.
Ask your friendly realtor to recommend you the best marketing strategy to attract the ideal buyer to a house like that – and decide how you will implement that strategy.
Also, look at the homes that sold at “average prices” and “wholesale prices.” Who bought those homes? Can you identify a common “buyer trend” for those properties? Decide if you want to avoid those types of buyers if they do not fit your pricing strategy.
TIP 3. Identify SPECIFIC strategies to achieve your target sale price
This will add lots of “creativity and genius” ingredients
Getting the best deal on the sale of your home is similar to getting the best deal when shopping for appliances. Being proactive and purposeful often helps!
The strategy you (or your realtor) pick should match the type of the buyers or the price you are targeting, and can include the following
- Carefully designed photos and description to attract the right buyers
- Immitate success: review the best sold homes in your area and see if staging, paint, finishes, and other details in the decor could help to attract similar success in price
- Proactive marketing designed to reach your target audience (so, if your target audience is an AirB&B investor or an out-of-state buyer, then actively advertising the house on sites and forums where it is most likely to be seen by your prospective buyer)
- Timing the market (watching for the seasonal ups and downs in the market to catch the “seller market wave”)
- Find buyers who are very motivated to pay your price. That could include investigating options such as offering seller financing (in full or in part) or rent-to-own options which could net you a higher sale price than traditional buyers
TIP 4: Know the art of negotiating the contract clauses
This will add both the “knowledge and experience” and the “creativity” ingredients.
Getting a great offer is one thing. Negotiating it into an even better offer is another! And then keeping that offer from falling apart during the time the house is under contract is a science in itself. Negotiations on the various provisions of the contract could cost you thousands, if not tens of thousands of dollars by the time the sale is completed.
Unless you are a realtor or have someone in your family who is a realtor, it might be best to delegate the handling of contracts and negotiations to someone with experience.
Make sure that you have a copy of the TREC One to Four Residential Contract (Resale) and its various addendums downloaded and go over it with your realtor to understand where the negotiation points could be and also the “gotcha” clauses are in the contract
Read Elena’s article on understanding how the appraised value affects your sale price, and how to work around the lower appraised value, if needed.
Decide which negotiation points are important to you, and which are not. You can get an excellent overal profit from the sale even if you agree to pay for the survey, for example.
TIP 5: Adapt to the market as needed
This will add the “knowledge and experience” ingredient to your “best sale recipe”
Home market is like the weather. Sometimes the sun shines hot and bright for weeks on end, and sometimes the rain pours for days. The weather outside cannot be simply ignored – and neither can be the home market when you are selling or buying.
Adapting to the market changes may mean additional work and research will be needed to understand what home shoppers are looking for, whether the “ideal buyer” you imagined befire is still the best choice for you in the new market situation, and what new strategies are available to attract highly motivated buyers.
Ask your friendly realtor to send you weekly market updates for your neighborhood and their analysis of the market trends. Do not pre-occupy your attention with national or even state-wide home market statistics. The market changes in New York or in Austin can be very different from market changes in, for example, Gainsville, TX. Also, the sales for multi-million dollar homes may be affected differently than sales for starter homes.
Focus on the locat statistic of sales within your part of the city or your neighborhood.
Decide whether the time is working for you or against you as far as the home market is concerned. For example, the Feds announced two future interest rate increases that are supposed to take place before the end of 2022. This may mean that, most likely, the market will cool even further and waiting for the market upswing may take a while.
Consider expanding the marketing strategies to capture potential home buyers whom you did not previously target. Also, review the previously mentioned tips on finding highly motivated buyers by considering owner financing a part or the whole purchase, or finding a buyer interested in the rent-to-own strategy which could bring excellent profits if you are willing to wait to get all of the cash from the sale a year or so from now.
Lean on your Realtor’s expertise. Realtors tend to receive tons of free training from title companies, mortgage companies, and industry insiders on the upcoming market changes and on the ways to overcome issues with appraisals, lenders unable to close the loan due to interest rate changes, and more. Leaning in on that insider knowledge may be just the extra push needed to get your home sold with a profit.
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