Real estate negotiating. This has to be one of THE most important roles of a REALTOR®, wouldn’t you agree?
When you first read the title of this blog, I’m sure you thought – “Buy a property below list price! Is that even possible these days?”
While it may not be as common as it used to be, yes, it is still possible. In fact, I had the pleasure of being a part of one of these deals for a lovely family just this past week.
If you are looking at homes in a high demand area with pristine finishes, you may not actually have the opportunity for any real estate negotiating. A seller’s REALTOR® will usually outline a specific date/time for offer presentations. It’s up to the seller if they’d like to consider any pre-emptive (aka “bully” offers) in advance.
Perhaps, you’re looking at a property in a high demand neighbourhood, but maybe it doesn’t quite have the same “wow” factor as some of the others you’ve seen. Alternatively, maybe you have found a gem on the outskirts of the city you’d like to be in. In either of these cases, the demand for the property may not be quite as strong.
This could give you the opportunity to not only get in an offer early, but also give you the chance to get in on some real estate negotiating (like the “olden days” ??).
It’s not a bad idea for your REALTOR® to have a conversation with the seller’s representative. Of course, they can’t give up the goods on exactly what the seller is hoping their property goes for, but they may be able to give you some parameters.
This doesn’t necessarily mean you need to stick within them.
Your REALTOR® should also evaluate what the property is actually worth. Just because a property is listed at a particular price, doesn’t mean it’s worth it. Take a look at the property history, what it’s listed for and what the comps are.
In this particular instance, the seller purchased the property just 8 months ago and listed it to re-sell for $80,000 higher. In this market, nobody would generally bat an eye at that price jump. We are talking about a condo in an older building however, not a single family detached home. The condo market actually slumped a little in 2021 so a reasonable increase would be 1%/mth.
After showing the property, the seller’s REALTOR® called me a few times. I came to the conclusion that their client was extremely motivated and very much disliked having prospective buyers coming through their unit periodically.
Even though the offer presentation was a few days away, we decided to send in an offer pre-emptively for $770,000 – $29,000 below list price. The seller signed back at $790,000 and our buyers countered at $780,000 – the offer that was accepted conditionally, pending a home inspection and for a lawyer’s review of the status certificate.
Following the home inspection, there were some minor things that came to light, so the buyers managed to save an additional $3,000 for a final purchase price of $777,000 – $22,000 below the list price!
While most sellers wouldn’t be thrilled to sell below list price, by today’s standards and current market conditions, they still sold for $57,000 higher than the bought the unit for 8 months prior, so they wouldn’t be out of pocket, after fees.
I believe in this instance; all of the parties were very happy with the real estate negotiating. The seller was able to wrap up the sale quickly and wouldn’t have to be displaced by buyers coming through their condo any longer and the buyers were happy to find a place to live for their family, in their desired location and below their top budget by a fair stretch. In fact, when they saw the property for the first time, they told me, “this feels like home.”
While the market has its challenges, you never know what circumstances a seller may be facing that could be motivating them to close a sale quickly. If you find a property you love and feel you can turn into your home, it doesn’t hurt to send in a pre-emptive offer and infuse a little bit of good old real estate negotiating into the process. You just might luck out!
Looking for a house or condo to turn into your home? Let’s talk! 647.896.6584, by email at info@serenaholmesrealtor.com or fill out my simple contact form. For plenty of other great tips, make sure we’re connected on social @serenaholmesrealtor and you’ve subscribed to my YouTube Channel.
If you’d like to kick off your property search, check out some homes here.
