DOES IT PAY TO BARGAIN?

Does it pay to bargain? When is the ‘best time’ to ask for and expect a discount? What should be considered ‘unrealistic’ when it comes to making an offer? All good questions. Most of us have the bargain hunter gene in us. We like, and expect, a good deal! When it comes to real estate it is no different. We want value and we want a discounted price if possible when we are buyers.

This is true for most of the consumer goods we purchase. In fact, according to an article I just read, a Consumer Reports National Research Center survey of 2,167 households this past summer found that more than 90 percent of those who tried to talk down the price succeeded on furniture, electronics, appliances, even medical bills.

Experts in the field of ‘haggling’ remind consumers there’s nothing wrong with asking for a cheaper price. The worst that will happen is the merchant will say "no" and you won’t be any worse off.

It is the same when it comes to purchasing real property. The only difference here is that if you offer too low a purchase price a seller may feel ‘insulted’ and outright reject your offer (or counter back at full price). Yes, this is true even in today’s buyer’s real estate market. It is also important to remember, your agent’s can’t tell you what to offer, they can only give you history of recent sales of like homes as a gauge of what seller’s have been getting for their properties.

Why do seller’s feel insulted when they receive a ‘low ball’ offer? Because seller’s have an ‘emotional’ investment in their home. They often feel the buyer is trying to ‘steal’ their home - not bargaining in good faith. Of course, when it comes to bank owned properties (homes that have been foreclosed on) the investor who owns the note usually doesn’t have an emotional attachment to the property. They are just looking at their bottom line - how much will I make if I accept the offer (or lose). As an aside, we currently have over 38 bank owned properties, which we feature on our website (click on the Bank Owned icon to view the properties and to receive more information).

Most retail merchants often price items with wiggle room. Home sellers, if they have been counseled correctly by their agent, usually have some wiggle room in their asking price and expect to accept less (though not in a hot sellers market). It is the fine art of negotiating that usually comes in to play here - figuring out how much less to offer without insulting the seller and finally arriving at a price both of you can live with and feel okay about (as can the seller).

It also helps to negotiate from a position of power. Bargains are most likely when you have the upper hand. Being fully pre-approved for a loan (or being an all cash buyer) helps when it comes to making offers on property. This takes out the drama of whether you, the buyer, will be able to perform. This means you need to get together with your lender early on to start the process to be fully pre-approved. It pays to do this, believe me...

There are others things to consider, therefore my suggestion is that you seek real estate counsel by talking to one of our professionally trained real estate associates. With two offices, and 85 plus associates to help you, your chances of finding the right home at the best price in today’s market is greatly increased. I wish you a win-win scenario.