Putting in a Bid – The Negotiation Process

After buyers find the property they want to purchase, the Realtor® will discuss with the Buyer the terms needed to place or take a bid. The bid is not just the price the Buyer submits, but consists of six key components.

The Buyer will need to have answers to these questions:

Current Property Status

Examples:

Do you have to sell anything in order to purchase? Do you rent?

Do you have to be out of where you are living at a certain time?

Financing

Examples:

Do you have to sell any other property to purchase this one?

Do you need a mortgage (contingency) to buy the property?

How much cash are you putting down in total as cash (equity)?

How much are you financing?

Are you pre-approved? (Provide a written pre-approval)

Who is your lending representative?

How much do you have to put down at contract? Is it 10%? Is it liquid?

Possession

Examples:

When do you want to close on the property?

Please remember, in NY State the date placed in the contract will most likely read “On or About.” This means that whatever date you agree upon, the Seller or the Buyer can postpone the closing date for up to about 30 days after that date with NO legal penalty. So when negotiating an offer, please remember there is a good chance it may not close on that date so try to ensure that you close within that 30-day window.

Inclusions and Exclusions

Examples:

Is the washer/dryer included; what light fixtures are excluded, etc.?

Is the playground included, etc.?

Other Terms

Examples:

Is there an occupancy agreement?

Are there penalties for closing after a certain date?

Is there going to be a property inspection?

If it’s a multi-family property, are any of the tenants staying, or does the property have to be free of tenants?

Are there Certificates of Occupancy for everything on/in the property?

And there are many others.

Price

Examples:

How much are you willing to pay for the property?

Note: Buyers, just because a property is ‘listed for a certain price’, it most likely will not sell for exactly that price. If there are no other buyers other than you for a certain property, it may sell below the listing price. But please understand, there are other offers from other Buyers for the property you desire, the final sales price may well be over the stated listing price. This is not uncommon in this marketplace.

Please realize that the ‘listing price’ is just a number that the owner and the Realtor® thought was their ‘best estimate as a market price’, and so they used that number as a starting point. But neither ‘the market’, nor the Seller, nor the Buyer, nor any Realtor® will set the market selling price. If there are multiple bids on a property and Buyers are willing to pay more than listing price for that property, then that is the market selling price for that house, no matter what was written as the ‘listing price’. Therefore, a Buyer may be able to buy the house for under the ‘list price’, but you must always be prepared to accept the ‘market selling price’, no matter if that is below or above any listed price.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: