It’s always helpful to find out why the seller is selling; however, you might not be able to obtain that information because either the seller or the listing agent will most likely refuse to tell you. But there is still plenty of information that can and should be gathered prior to making an offer that does not require their cooperation. None of the following points are sufficient enough alone, but each used in conjuction with the other should help you make a decision on which price is best to offer.

• Find out how much the seller paid. While it’s usually true that the seller’s paid price has little bearing on today’s market, it could be a helpful piece of information if the purchase was made years ago in a depressed market with little appreciation since. In that case, the asking price should be closer to the seller’s purchase price.
• Figure out what the seller’s outstanding mortgage balance is. Unless they are in default and willing to participate in a short sale, they will most likely not be willing to entertain any offers less than the mortgage plus closing costs. Higher balances give you more leverage whereas lower balances give the seller more leverage, since they are most likely not in a hurry to sell.
• Examine comparable properties. When looking at comparables, only use those that most closely resemble the property in question, and don’t look beyond six months old, because appraisers won’t either.
• Look at price-to-sales-price ratios. Ask your real estate agent for a report covering the last six months, compare listing prices to sales prices, and analyze how large the gaps are.
• Calculate per square-foot cost averages. Usually smaller properties are priced higher per square foot whereas larger properties are priced lower, so taking an average of all past sales is not going to be accurate, however, you can check trends amongst similar properties and use that information to your advantage.
• Find out how long the property has been on the market. Sometimes listings expire and are resubmitted as new listings. Make sure your agents makes clear what the DOM (Days on Market) of the property is. Properties that have been on the market for longer than 30 days usually means that the seller is more motivated to wheel and deal.

Experienced buyer’s agents will provide direction, market information and suggested price ranges, but the final price offer is the buyer’s responsibility. It’s not the agent’s purchase, it’s your purchase! When making the offer, you should be as specific as possible. List everything you are asking for, that includes appliances, furniture, fixtures, or any other items. Of course, the seller has the right to refuse or make a counter offer once your initial offer has been received. Assuming that your offer does not get initially accepted with no modifications or counters (usually it will not), it is now time for negotiating counter offers.

Counter offers are generated by a seller after a buyer has submitted an offer to purchase. Typically, counter offers will state that the seller has accepted the buyer’s offer subject to specific particulars, such as a modified total consideration price, increased earnest money deposit, refusals to pay for certain reports or fees, a request to change service providers, altering closing or posession dates, excluding certain personal property from the contract, or modifying contingency time frames. Just as a seller can submit a counter offer to a buyer, a buyer can counter the seller’s counter, which will then become a counter to the counter offer. There is no limit to the number of counter offers that can be submitted back and forth. Offers also geenrally specify a date of expiration in the event the seller elects not to respond, same is true for a seller’s counter offer. Should the buyer simply accept the counter, it simply gets delivered back to the party designated to receive it. Time is always of the essence. Take into consideration that the seller has the freedom to accept another offer while you may still be deciding whether or not to sign the counter offer.

Every buyer should obtain a property inspection. Most contracts give buyers the right to cancel a contract if the inspection reveals repairs or defects that are unacceptable to a buyer. However, if the repairs are minor, you should try to renegotiate the sales price, or ask for a credit against your closing costs. Also don’t be afraid to ask for additional extras, such as a home warranty protection plan, which covers you in the event an appliance breaks down or any major systems of the property malfunction. You can also ask for items you wouldn’t actually want. If a listing states that the washer and dryer are not included in the sale, ask fro them! If the sellers refuse, your agent can always come back with a “Ok, if we leave the washer and dryer, are you then ready to sign our offer?” arguement.

Try to keep the acceptance period to the minimum. There is no reason to give the seller more than 24 hours to make a decision upon presentation. Don’t give them days on end to talk to their entire neighborhood about the offer. Keeping it short puts you in control, and lessens the risk that another higher offer may be presented while your offer is being considered! Also don’t forget to keep ego at the door. There is nothing more destructive to a negotiation than getting ego involved. For example, pointing out faults that make a property not worth what the seller is asking on the initial offer could be thought of as establishing a premium in the seller’s mind that the buyer will have to pay. In other words, paying for the privilige of insulting the property. Needless to say, this is unnecessary, always complement the seller’s property, their beautiful children and wonderful dog. Use market data to support your reasoning, not insults. Never try to win every point, you will have to be willing to give up some requests.

Don’t show too much affection towards a property, you would be working against your own leverage if you did! You may also have some constrains that should be kept quiet. Some exmaples include instances such as having to move quickly due to perhaps a closing on your current property, or the fact that you have had difficulty finding a property close to work, you may be in the middle of a divorce or may have an interest lock that’s about to expire. Disclosing any of those facts to the seller will not get you a better deal, but will instead probably put you in a much worse negotiating position. They all signal weaknesses. You should instead position yourself as a fully qualified, trustworthy buyer who is appreciative of the property, nothing more, nothing less.

Trust is the single most important factor in getting what you want from a negotiation. People do not begin by completely trusting one another, especially when money is involved. They assume that the other party will have interests in conflict with theirs. It is crucial to establish rapport as quickly as possible with the agent and the sellers, and let them know that you will be reasonable and responsible people to deal with. Do this by finding some common ground with them. Look for common interests, similar jobs, or similar children’s needs. Respond in a timely manner to their counter offers. Show that you are qualified to buy the property. Begin by establishing trust, and then reinforce it throughout the process.