3 Tips To Buy For The Right Price

Certified Mortgage Advisor
NMLS 1701021
Published 
March 19, 2019

Tips to buy for The right price

If you want to purchase a home for the best price possible, continue reading this. We're going to talk about three things. Number one, we're going to talk about timing. Number two, we're going to talk about motivation, and number three, we're going to talk about clean bids.

1. Timing

Number one, we first need to figure out if we are in a buyer's market or a seller's market.

What is a seller's market and buyer's market

A seller's market is where the sellers have control. It means that there's low inventory and a lot of buyers are looking to buy. So the person who has the upper hand is the seller. They get to dictate a lot of what happens in the contract because they have a more favorable market position, vice versa on the buyer's market, in a buyer's market. You have more control as a buyer, right? There's a lot of inventory. There are not a lot of buyers so sellers are more desperate to settle. So right now we're moving from a seller's market we're in a kind of neutral territory and we'll see where the market goes. But keep that in mind when you're structuring a bid is you don't want to be too aggressive because sellers right now are used to feeling like they have the control and the negotiation position.

So when you hire a realtor and make sure you have that conversation about what the timing looks like in the market. It's all about supply and demand and makes sure you structure your offer and the best way possible.

2. Motivation

Number two, let's talk about motivation. So, what we want to do is figure out if the seller of the house that we're looking at is motivated. So maybe they have some personal factors that went on, but one of the biggest tellers of figuring out if a seller is motivated or not is to go and look at days on the market and price changes.

Days on market

So days on market tell us how long this property has been listed for. A good property that's priced well in its market should sell in about two weeks. If it's not, something is going wrong with that listing. So this could be you know, just a different assortment of things that might be priced incorrectly. There might be problems with the home. They might've already had an offer and that fell through with financing.

There are a lot of things that can happen. Doesn't mean it's a bad house, but it's a conversation to have with a realtor. Look at days on market to figure out what the seller's motivation might look like.

Price changes

Something else to look at is have they had price drops over the past couple of weeks? Did they put it on the market and take it off? Did they have financing fall through? Use all of these to your advantage to figure out what kind of offer you're going to put in? Don't go in blind, not knowing or having a clue on the motivation of a seller.

3. Make your bid claim

So we did, we did the timing. We did motivation. And the last piece of the puzzle is to make your bid claim. So here's what I mean by that. Everyone wants to structure a bid where they get the most closing costs paid for the title insurance paid for it. They get all of the tax credits. They get personal items. As much as you want in your contract, know that it could come at a cost of losing out on the negotiation.

There's no need for greed

So when you are setting up the offer that you're wanting to put in a home. Don't try to be greedy. If you're wanting to get the house, if you want to get the house, make sure that your bid is as clean as possible, ask for as little as possible so that you can make sure you had the strongest negotiation position.

Now, this comes into play with all those other factors. If you are in a seller's market and the seller has a not extreme motivation to purchase, then if you come in asking for. It's going to be a tough sell for that seller to want to accept the offer. Whereas if we're lot talking about a buyers market, maybe the seller has a high motivation. You might be able to ask for a lot in terms of concessions and other credits, as well as maybe personal items that you can get into the contract.

So keep in mind your timing, motivation, and keep your bid clean.

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