Making a deal on “point”
As with many things in life, the answer to “What is a “good” first offer?” is “It depends”.
There are many Praedium axioms. One is, “it is not just the real estate, itself, that is important. It is the situation from which it is being purchased.”.
“What does that mean?”, you might say.
Let’s take a look at one of the most important “situations” …….seller motivation.
An “good” offer on the same home that has just hit the market and is “priced correctly”, is a totally different situation than if that same home has been on the market for a few months. Even though you, the buyer, are viewing the place at the very same price point, an offer for a home that just hit the market may likely be higher than an offer on that same home if it has been on the market for a while.
Why ?
Seller motivation relative to effective buyer interest is critical. A properly priced home in a desirable area will likely garner the interest of a number of buyers. Keep in mind that you are ( whether you actually know it or not) are competing with other buyers. So, it is best to keep that in mind. There is much less chance that, in THIS situation, you are negotiating in a vacuum.
Conversely, if that same home has been market exposed for a few months, and has also seen a price drop or 2, that seller is going to be a bit more motivated than the seller who has just put his/her place on the market. So, you could possibly initiate with a slightly lower dollar amount than with a just listed home, as the seller may have been softened a bit.
Rare is it that a seller puts a home on the market NOT wanted to put it under agreement that day. Thus, the situation dictated by the likely seller attitude plays a great deal in factoring what dollar level of offer to initially make.
Regardless of the situation, however, keep in mind that a low ball offer, no matter what the situation, tends to be met with a negative reaction.
A good first offer should, at least, get some type of counter offer.
Never forget….you never get a second chance to make a first impression !