New Orleans Real Estate – Home Buying Guide – Part 6

New Orleans Real Estate – Part 6 – Home Buying Guide – Offer Strategy

This is Part 6 of my exclusive New Orleans Real Estate Home Buying Guide.

Strategy…How are we going to best position our offer to get you the house? This part of my home buying guide will focus on the price, terms, and conditions that make up offers. We will use these items to specifically create the best offer for the situation at hand.

Leverage. Buyer’s leverage is basically the amount of bargaining power a buyer has based on specific information surrounding the property. How badly does the seller need to sell? How badly does the buyer need the house? Is is a buyer or seller’s market? These are just a few questions that can affect the amount leverage a buyer has. I am really just talking about who holds the power…whoever holds the power drives the negotiations.

Regardless of the type of market that we are experiencing, the primary goal of your offer is to get the seller to accept your terms. The secondary goal is to get them to the negotiating table. Ok, here we go with some specifics:

Step 1: Figure out your intentions. If the goal is to buy the house as quickly as possible, you have to come as strong as possible with your first offer. If the goal is to see if you can steal the house, you can put in a low ball offer. Keep in mind that low ball offers can offend the owner and ruin any chances of you buying the house so make sure to keep the offer reasonable. Your ultimate intentions will drive how you determine price, terms, and conditions. Is your intention to get the house at a low price? Is it to close at a much later date? Is it to get cash out of the seller to help with closing costs? All of these intentions will affect the strategy of the offer.

Step 2: Determine Price: Based on your intentions, this will determine your starting price. If you have to have it, start at a high price. If you have other houses that you like, maybe consider starting at a lower price. Many buyers forget that the offer is made up of more than price. You can use these other terms to enhance the appeal of the offer.

Step 3: Choose a Deposit Amount: A high deposit amount shows the seller that you are serious about buying the house. Because you are willing to risk a high dollar amount, the seller may be more prone to accepting a lower price. The seller can see that you are a real buyer and they may not want to risk losing you by creating a counter offer. A low deposit amount may completely turn off a seller and they may reject your offer without countering. A typical deposit amount is expected and often loses the power a deposit can have. I recommend placing as high of a deposit as you can to create a bit of leverage.

Step 4: Choose a Closing Date: This is another aspect of the offer that can be useful to the buyer if used correctly. Most buyers want a quick closing date. By offering a quicker than standard close, the seller will find your offer more attractive than those with a long close. Obviously, if the seller wants a longer closing date, giving them that is what the smart buyer will want to do.

Step 5: Other Terms and Conditions: There are numerous other terms and conditions in the offer that buyers have to choose. Each of these items can be used to benefit the buyer and increase the likelihood that the seller will accept the offer. It is important to remember that while you want to get the offer accepted by the seller, you have to keep your best interests in mind as well. It is a delicate balance.

~~

Each situation is different and requires its own strategy. I really enjoy this part of real estate. It is also another reason you should use a buyer’s agent. The agent will be seasoned in real estate strategy and should be able to best position your offer in your situation. I could go on and on about offer strategy but I don’t want you to get bored! Stay tuned for the next part of my home buying guide…Inspections.

New Orleans Real Estate Home Buying Guide:

Part 1: Financials

Part 2: Buyer’s Agent

Part 3: Mortgage and Insurance

Part 4: Finding a Home

Part 5: Make and Offer

Part 7: Inspections

Part 8: Closing

_____________________________________________________________________________

You may also be interested in: New Orleans Real Estate – The Definitive Blog

This New Orleans real estate home buying guide was provided by Darryl Glade, Realtor with RE/MAX N.O. Properties. Darryl can be reached at darrylglade@remax.net or by phone at 504.451.8960. Darryl’s office is conveniently located in Uptown New Orleans at 8001 Maple Street. Darryl works throughout the Greater New Orleans area including Uptown, Lakeview, Broadmoor, Mid-City, Metairie, Kenner, Westbank, French Quarter, and the Warehouse District.

For New Orleans and the metro area real estate info, please see New Orleans Real Estate.

To search New Orleans Properties, please see New Orleans Property Search.

Click here to view Darryl Glade’s Real Estate Profile.