Lessons in Loosing. Why a Seller Will Decline a Buyer's Offer

“THE LOWBALL”

Seller Interpretation: Regardless if our home is new to market or on the market for awhile, offering a lowball offer is a guaranteed way to either offend me or make me think you’re ‘not that serious.‘

Be realistic. Your Urban Luxe broker will help you research comparable properties, what they sold for and when. Using both helps better determine fair market value and price. Including these ‘comps’ with your offer will show the Seller and Seller’s Broker see you are serious and have done your homework.

“WE GOTTA SELL BEFORE WE CAN BUY”

Seller Interpretation: Wow. Really?! In this market?!  Sorry, guys. Contingent on the sale of an existing home means you want me to go under contract with you, take it off the active market, stop marketing it to other Buyers who might not have to sell in order to buy and take one giant leap of faith that your home sells in a timely manner so you can buy mine.  

In a market with low inventory and high competition this is probably the toughest obstacle to overcome. There are many ways to make a contingent offer more attractive by bumping price, adding a ‘right of first refusal’ clause and catering to Seller timelines, but the bottom line this is the position of least negotiating strength. Ask your Urban Luxe broker about ‘bridge loans’ and see if they are a good fit for you!

“NO LENDER OR PROOF OF FUNDS”

Seller Interpretation: When you fail to include a letter from a mortgage lender or proof of funds from a bank, I don’t know if you’ve actually gone through the pre-qualification process or just filled out a mortgage widget online. I have absolutely no idea if you can really afford this house.

Get pre-qualified with a real live lender before you start looking for houses. Your Broker should have plenty of recommendations of good, competitive lenders if you don’t already have one in mind. This will not only better determine your specific price point, but it will also assure the Seller you’ve had a lender has look at your financials and has pre-qualified you for this purchase.

“HEY MR SELLER, CAN YOU HELP US OUT?”

Seller Interpretation: Ask a Seller for down payment or closing cost assistance and these are the likely responses:

1- “My house is for sale for $500K. I know you offered full price but with $5K in with down payment assistance you are really only offering $495K. No matter how you slice it, concessions subtract from my bottom line.”

2- “You don’t have enough cash on hand to put down to meet your down payment or closing costs requirement? That makes me question your financial ability.”

Sometimes Sellers get stuck on a specific number. Sometimes Sellers don’t want to set a price precedent which lowers the value of all other houses yet to sell in the neighborhood. Your Urban Luxe broker’s job is to find out motivation and triggers from the Seller’s agent and then craft an offer that is competitive, even if you do require down payment or closing cost assistance.

“I WANT EVERYTHING AND THE KITCHEN SINK” OFFER

Seller Interpretation: Thanks for admiring that perfect piece of artwork in the hallway that came back with me from Italy, those extra large, contemporary flower pots that took me two years to find, my brand new patio furniture that I haven’t even enjoyed a full season, the dining room rug that was my grandmother’s, the bedspread in the master bedroom (true story!), the picture frames my brother made in art school, my classic car in the garage, our family dog or cat… Are you serious?! I’m looking for a hassle free sale and if you are asking for all of this, how nit picky are you going to be at inspection?  

Write a clean contract and leave the personal items out of it.  That belongs in a Bill of Sale and not in the initial contract.

Bottom line; Denver is a highly competitive market. Work with an agent that has a proven track record, experience and business savvy. It could make the difference between winning and loosing!