Joe Wilson's Silicon Valley Real Estate Blog

If you've been out there looking at home listings for weeks or months with the intent of finding that perfect home, here's some advice for you once you finally find it.  You're not alone! That's right, you and hundreds of other buyers are all out there looking for that perfect home...the one that's in the great neighborhood, has been recently remodeled, has beautiful hardwood floors, has a reasonable commute distance to work, is light, bright and open, and is priced at or below market value. So after searching every weekend for months to finally find the rght home, what's your first reaction?...to try to negotiate the best price, right? If that's your thinking, then I'm glad you've discovered my blog because likely you're going to be bitterly disappointed.

Here's the best strategy: Make a fast offer and make a great offer. You want to make a fast offer because in most any market, the best properties, particularly those that have been priced competitively will always sell quickly. Your agent can pretty quickly pull neighborhood comps to assess whether the asking price is fair but assuming it is, you want to get your offer in before your competition has discovered it. That means don't let the Seller have the first open house because first open houses usually attract a lot of Buyers and if it's a great home at a great price, offers will come in within a day or two after the open house. Secondly, while you don't want to overpay, if it's the perfect home, don't worry about that. Lenders today are more risk averse than ever and your lender won't let you overpay. Remember, the home has to appraise for at least the purchase price (assuming you have a standard appraisal contingency) and if it appraises low you can cancel the contract or renegotiate the price with the Seller. The point is, you want to offer the Seller his price, include reasonable terms (contingency periods, escrow periods, etc.) and get the home locked up fast before you find yourself in a bidding competition. If you try to make a low offer in hopes of saving a few bucks each month on your mortgage payment, you risk leaving the door open for a competing offer to steal away your dream home. Believe me, I've seen it happen many times and it's a bitter lesson for Buyers. 

If you're working with me, I like to move fast because I've been very successful with this strategy. However, if you're working with someone else and they don't have a sense of urgency once you've located the right home...then you can show them this article.  Good luck!