Read Tara’s article here.<\/a><\/p>\nTara makes an important point. As any good economist could tell you, people’s decisions are based only partially upon financial considerations and their own best interests. Emotions come into play. If you fail to personalize the transaction, you are just a pile of numbers to the seller. If you hire a pit-bull to represent you, you risk alienating the seller. If the seller doesn’t trust you to complete the transaction, a high offer means nothing. In more than twenty years as a real estate broker, I’ve seen many homes go to buyers (or renters) whose offers weren’t the highest dollar amount.<\/p>\n
I would add one more item to Tara’s list. Find out what motivates the seller. <\/em>This is the most important rule in negotiating \u2014 and the most frequently overlooked. Perhaps the seller is waiting for a house to be built and would prefer a long settlement so they don’t have to move twice. Perhaps the seller has already bought another home and needs a quick settlement to remain solvent. Don’t assume. Ask. Tailor your offer to the seller’s specific needs, and you have a much better chance of snagging that dream home.<\/p>\nAnother point that Tara touches on could stand some clarification. Your bid should be relative to the current market value of the property. During periods when home prices are rising rapidly (whether we’re in one of those periods now is debatable, but if you’re in a competitive bidding situation, you can assume we are), the winning bid usually will be slightly above market value.<\/p>\n
A very effective strategy for making sure your bid is accepted is the “escalation clause.” You offer what you consider a fair price for the property, but your contract includes a clause that increases the price automatically \u2014 eBay style \u2014 if there is a bidding war. The maximum escalated price you specify should be as described earlier: slightly above market value. For example, you bid $500,000 with an escalation clause up to $550,000, in $5,000 increments. This means you agree to pay $5,000 more than the highest bid, up to a maximum of $550,000. If there are no other bids, you get the property for $500,000. If the highest bid is $525,000, you get it for $530,000. You’re only out of luck if the maximum bid is more than $550,000. But that’s OK, because you determined that the house just isn’t worth more than that. Just be sure to include language requiring the listing agent to prove <\/em>the amount of the highest bid.<\/p>\nObviously, your bid must also be an amount you can afford, but bear in mind that the market doesn’t care what you can afford.<\/p>\n","protected":false},"excerpt":{"rendered":"
Have you ever found the perfect home, only to have it snatched away from you by another buyer? In her excellent article, Tara-Nicholle Nelson of Trulia discusses ways to avoid being the victim of a competitive bidding situation. Read Tara’s article here. Tara makes an important point.<\/p>\n","protected":false},"author":91,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[14,34],"tags":[36,20,30,37,35],"class_list":["post-79","post","type-post","status-publish","format-standard","hentry","category-market-trends","category-strategy","tag-buying","tag-home-prices","tag-market-timing","tag-negotiating","tag-strategy-2"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/posts\/79","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/users\/91"}],"replies":[{"embeddable":true,"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/comments?post=79"}],"version-history":[{"count":5,"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/posts\/79\/revisions"}],"predecessor-version":[{"id":84,"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/posts\/79\/revisions\/84"}],"wp:attachment":[{"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/media?parent=79"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/categories?post=79"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.neighborhoodspecialists.com\/blog\/wp-json\/wp\/v2\/tags?post=79"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}