In any market, a strategic offer is key. Though every transaction is different and you should of course keep your own priorities top of mind, here are some general tips.
If you haven’t already, the first thing you should do is acquire a pre-approval letter from your lender or mortgage broker.
Having a knowledgeable buyer’s broker in your corner is a huge boon to buyers, and this service is free of charge. As your advocate, they will help you build your team and compare lenders, attorneys, inspectors and, as needed, insurance agents, contractors, architects, designers, movers and more. A broker can offer a customized home search and alert you to new listings as they hit the market, provide you with a comparative market analysis highlighting data you can use to strategize the optimal bid, prepare your offer to showcase you in the best possible light, guide your negotiation, assemble board packages and serve as an intermediary to all affiliated parties throughout the transaction for a smooth process from start to finish.
Familiarize yourself with the local market and what’s happening with property sales and developments in surrounding neighborhoods. Get a feel for local amenities you find most desirable, transportation options and school zones that meet your needs.
Find out how long the property has been on the market and get to know the listing history. If previously listed, can you deduce why it hasn’t yet sold? A seller may be more eager to accept a lower offer after a property has been on the market for a while, particularly if they have attempted one or more price reductions or indicate a “motivated seller” in the ad copy, but don’t drag your feet in attempt to wait it out.
If possible, try to find out about the seller. Is this an investment property? Are they upsizing or downsizing? Moving to another city? Depending on their plan, they may be more or less willing to accept lower offers.
Is there a need for a gut renovation that could justify a lower closing price or are there just minor cosmetic issues? Be careful not to insult the seller by pointing out the property’s flaws.
If there’s anything you can do on your end to sweeten the deal, consider it. This could include allowing the seller to choose their target closing date, letting them exclude certain fixtures/appliances from the purchase or alternately purchasing some of their furnishings separately, putting more money down to mitigate appraisal issues, setting a contractual appraisal floor below the sales price to protect the seller in the event of a low appraisal, buying the property in all-cash or waiving your financing contingency. This we would only advise if you can avoid putting your deposit at risk by having the capability to borrow funds to be able to close the deal should financing not come through.
Anticipate what other buyers might say or do and point out that you’re unique. Perhaps the property is on a loud street, nearby construction is scheduled to begin, it’s a top floor walk-up, needs a renovation or has lackluster views. This may be off-putting to other buyers, but you’re willing to overlook it.
Include a personal letter about yourself and what purchasing the property would mean to you. What do you love most about it? How would it change your life? What did you do to get here? Include any information that would provide peace of mind for the seller and potentially a co-op board.