Monday, April 2, 2007

Home Buying 101: Don't Be Afraid to Underbid

Real Estate Lesson #2: The asking price is just a starting point for negotiation. If you want a home that is priced out of your range, make an offer anyway, for an amount that you can afford.

A good agent should be able to feel out the situation and determine how low you can go and what sort of offer the seller will consider. If you are buying on your own, look and listen for specifc language. If you are dealing with a "motivated seller," this means they are eager to sell will consider a lower offer.

New home builders and condo developers will be hesitant to lower the price on any one unit by too much. With several units to sell, your "sale price" becomes public record, and can affect the selling price of their other units. In this case, you will need to be creative. Other than lower the price, what else can the seller do for you?

The end result of my search? I made an offer on that first property I liked, and another, with no luck. The third time was a charm. I found a sunny, spacious, newly renovated condo I didn't quite think I could afford. Mark encouraged me to pursue it anyway.

We made an for $10,000 below the asking price and request an additional $10,000 rebate towards closing costs and two years of condo fees paid by the builder. The builder only agreed to pay 18 months of condo fees, but accepted the remaining terms of the offer! And, I got the rebate from Mark along with the first-time homebuyer tax credit from the DC Government. The net price of my condo was more than $29,000 below the asking price.

3 comments:

Brian said...

So wait...you can buy things at prices lower than advertised???

Sarah said...

Yes...that is why they call it an "asking price!" Sellers can ask for whatever they want, but you don't have to give it to them. It also depends how many other buyers are interested and how quickly they need to sell the property.

Brian said...

I was trying to make fun of you but you ruined it :(