What happens when the seller of the house you really love won’t budge off asking price, and you simply cannot up your bid? Answer: You dig into your bag of buyer tricks and choose the right strategy.
Although it’s money that usually will motivate sellers, there’s more than one way to win this game. If you really want the house and your offer is at least within the ballpark of others on the table, don’t give up until you’ve tried some creative ways to motivate your seller.
1. Find out what your seller wants
This one is easier than you might think. There’s only one step: just ask.
Each seller’s situation is unique, points out Tali Raphaely, president of Armour Title Co. “Buyers just need to educate themselves on the goals and needs of the sellers to find out what other types of arrangements or contract clauses the sellers would find especially helpful.”
For example, some sellers want a short escrow period, and some want a longer one. If you know which your seller wants, you can accommodate those needs.
“I always suggest asking the listing agent what the perfect escrow period for the seller is,” says David Kean, a luxury home specialist with Teles Properties in Beverly Hills.
2. Offer cash
If you can offer a cash sale, you have a great chance of getting the seller to accept your below-asking-price offer.
“Nobody will turn away a cash buyer,” says Julie Pelle, a luxury property specialist in Scottsdale, AZ.
But if you’re like most people and will be taking out a mortgage, do the next best thing and secure a preapproval letter from your lender. Sellers often prefer a strong offer to a high one. It’s the difference between knowing the deal will close and worrying about the deal falling through.
“Submit a well-written, straightforward offer and include a loan preapproval as well as proof of down payment,” recommends David Kean.
3. Rent the house back to the seller
Your seller might not be ready to move just yet. To get the price down, you could “offer the seller the option to stay in the house after the closing date … for a specified period of time,” says Raphaely.
Rob Williams, a Washington, DC real estate agent, explains how: “Close within the traditional 30-day window so that the seller gets the proceeds from the sale, but let them remain in the property rent-free for a short, specific time period, typically one to four weeks.”
4. Waive contingencies
This tactic is controversial. It’s like buying a used car “as is” without first having a mechanic check it out. This might work out if the car is certified pre-owned from a dealer. Might not if it’s a lemon with no warranty from Sketchy’s Used Car Lot.
Some houses are riskier than others, and while some real estate agents recommend this move, most don’t.
“No contingencies and being flexible may be attractive to the seller,” says Katherine Salyi of Nest Seekers International, Team Ryan Serhant in New York.
But Andi Blackwell, a broker in Portland, OR, says waiving contingencies is a major don’t. “Giving up your right to walk away based on inspections or appraisal could cost you far more in the end.”
Confused? Your real estate agent can help guide you.
5. Offer to buy the furniture
Many sellers don’t want to bother moving all their stuff. If you like the furnishings, let the seller know you’re interested in buying them and make the furniture deal a separate transaction with a separate bill of sale.
6. Write a heartfelt letter
Although most agents will tell you that sellers usually care more about their net profit than about whoever moves into their home, writing a heartfelt letter could tip the scales.
Pelle has her clients include a letter that explains how “they look forward to enjoying the home just as much as the current owner has.” She’s found that sellers appreciate buyers who will respect the home, especially if it’s a unique or historic property.
7. Play hardball
Realistic sellers don’t expect buyers to pay more than the home’s value. If a seller’s price is overly optimistic, work with your agent to kindly point this out. Include comparable sales and neighborhood statistics.
But hardball has its limits. Some buyers try to get the price down by pointing out how much work the home needs.
“Trying to win through intimidation is soooo yesterday,” says Sissy Lappin, a Texas real estate agent. “Insulting someone’s home is like insulting their child.”
8. Think outside the box
In this case, it’s the pizza box. One Portland, OR buyer who owned a pizza restaurant offered the seller “free pizza every month for life.”
“If you have a special service or product, use your assets,” says Andi Blackwell.
In your experience, what strategies motivate sellers? Tell us in the comments below.
