Things have changed since the crazy market of the early months of this year. Here are some pointers in buying a house in a slow market.
1. Do not make a ridiculously low offer. While I believe in getting the best deal, asking an owner to sell his house for $300k off the selling price is crazy and the market is not that bad. If you make an offer like this you will offend the owners and they will not look at anymore offers from you. I’ve had this happen to crazy clients of mine. The best thing is to ask your agent to run a figure through the listing agent and see what reaction he gives.
2. How long has this property been on the market. This is key to understanding the sellers. Usually when the market changes, there are many sellers who will not change with it, and while you may be looking at this house, you may be wasting your time. The reason that the house has been on the market so long is that the owners are not willing to budge on the price. If they were, it would have been off the market within a few weeks like it should be.
3. Be firm with your offer and be willing to walk away. Sometimes to get a great deal you must be willing to walk away from a house. The best deals that I’ve gotten for my clients is when we put in an offer in a slow market and we walk away because they are not willing to budge. Then after a few days or a week, the agent and client will realize that the offer is all they are going to get at this time and they are willing to come back to the table. In some cases we might go up a bit, but we still get a great deal in the end. In some cases we walk away and loose the deal but that is the risk. The problem when you fall in love with a house before you buy it is your negotiating powers get lost in some cases because you are not willing to walk.
4. You must negotiate. When putting in an offer which is lower than asking price there are things that you might have to concede in order to make the deal work on both ends. Its not about just getting your way because you are buying a house. When asking for less money, you might have to concede closing date, appliances, maybe something else that the owner is not willing to part with at that price, like appliances. In many cases these things are minor but the seller does not want to feel like they lost everything. The best deals are when you get a lower price, and for example you give them the extra month they need to close so their kids can finish up the school year.
5. There are other buyers still in the market. Don’t think that you can just go into any negotiation and bully the sellers. Sometimes just by being an asshole the owners will decline your offer. No matter what the market says. I’ve been on both ends of that deal due to my buyers and sellers. There are others still looking at the market and they would rather negotiate with them if you come into their house and tell an owner how outdated their home is. Just because you have the upper hand it doesn’t mean that you own the house already and can dictate what happens. Some people don’t need to sell their house because its on the market, sometimes they are just seeing what they can get for it, or if for the right price they will sell, but if not they can rent it out.