ResalesWhen You"re Making An Offer -- Don"t
There are some things that don"t count, when you"re trying
to decide how much to offer for a house.
The first thing that doesn"t count is an oral offer. The
seller could say in front of 15 witnesses, "Yes, I"ll sell you
the house for $120,000, and I"ll be glad to give you a receipt
for the $20,000 you"re handing me to serve as an earnest money
deposit. Let"s shake hands on the deal."
And if the seller backed out, and you hauled the 15
witnesses into court to prove he had accepted your offer, it
wouldn"t do any good. You couldn"t force him to sell.
Nothing counts, nothing is legally enforceable in the purchase
and sale of real estate, unless it"s in writing. (That"s
according to a law known as the Statute of Frauds.)
Not even that $20,000 you gave to "seal the deal" would do
the trick -- though I trust the judge would order it returned
to you.
But to get back to the original question -- what shouldn"t
you do when you"re making an offer?
The first don"t is -- unless you have specifically hired
your own broker, an agent who is legally obligated (preferably
in writing) to keep your information confidential, watch what
you say. Don"t ever tell a seller"s agent "We"re so crazy
about the house that if they don"t take this offer, we"ll go
higher." The seller"s agent, as a matter of fact, is legally
obligated to report a juicy tidbit like that to the seller.
Some people think the right process is to start with a low
bid, expect the seller to counter-offer with a reduction in
the listing price, then you counter with a few thousand more,
and you bargain back and forth the way you would in a mid-East
peddler"s booth.
Experienced brokers can tell you, though, that too many
volleys usually kill the deal. Tempers begin to rise, someone
says "It isn"t the money, it"s the principle of the thing" and
that"s the end of that.
It"s often wise to make your original offer close enough
to the asking price to tempt the sellers to close with it
immediately and be done with the thing. They won"t have to
keep the beds made and the dog tied up every day. Maybe it
isn"t exactly what they hoped for, but still...
Don"t base your estimate of proper price on the tax
assessment figures. Even in communities where a skilled
attempt is made to keep those in line with market value,
they can"t be as accurate as the operation of supply and
demand in the open market -- what other buyers have been
paying for similar property in the neighborhood recently.
Your agent can furnish records of such "comp" sales.
Don"t assume the sellers have built in a cushion because
everyone expects a "usual" five or ten percent bid under the
listing price. Some owners hate haggling and may list at
rock-bottom for a quick sale.
If the house has been on the market for many months at a
given price (inquire, you"re entitled to an honest answer),
then the buying public has voted that it isn"t worth what"s
being asked. Don"t offer full price.
On the other hand, don"t fool around if you stumble on a
bargain. (If you"ve been househunting in that neighborhood
for a few weeks, you should be able to recognize one.) If a
house is "hot" -- unusually attractive, underpriced, just
listed -- it won"t last long. Offer full price. If other
buyers are swarming around an open house, your offer may be in
competition with others by that evening; consider offering
something over full price.
I"m Edith Lank, and I wish you good luck.
More advice for buyers.