NEWS YOU CAN USE

The art of the aggressive offer                By Amy Hoak, McClatchy Newspapers

CHICAGO
    Homesellers are not automatically turning up their noses at offers that come in far below their asking price these days as prices stagnate and the inventory of homes for sale remains elevated in many markets.
    But buyers who do ask for deep discounts still risk offending sellers to the point of quashing any deal. So before making an aggressive offer, some homework is in order, real estate professionals say. Further, buyers need to effectively explain why the price of a home should be lower.
    “There’s a danger of them taking it too personally,” said Jon Boyd, president of the National Association of Exclusive Buyer Agents. “When you’re making the offer, if you justify that offer with outside data, then it’s much less likely to be perceived as being an insult or (the buyer) not as serious,” he added.
    Heed these three guidelines on how — and when — to make an aggressive bid for a home:
Learn how motivated the seller is
    Certain sellers are going to be more willing than others to negotiate a low offer, and there are several giveaways that might indicate more leeway on the issue of price.
    For instance, if the sellers already have purchased another home and that sale has closed, they’re likely to be more willing to make a deal, said Dick Gaylord, president elect of the National Association of Realtors and a broker with Re/Max Real Estate Specialists. And certainly, if the property has been on the market for a long time, sellers will be interested in entertaining any offers, he added.
    Overall local market conditions also play a role. A sluggish housing market, for example, can help drive down the price, and the longer a home is on the market, the readier the seller will be to make a deal.
Make your case with hard facts
    When putting together an aggressive offer for a client, Boyd doesn’t just hand the seller a purchase agreement with the price the buyer is willing to pay; he creates a cover letter explaining exactly where the number came from.
    It also could be important to include details regarding the amount of inventory in the immediate surrounding area, he said.
    “If we just looked at the relative values of the houses that sold, we would end up paying too much for that house because we know that the values are going to fall,” he said. “If we see two years’ worth of inventory, we should be buying 5 percent, potentially 10 percent less than what houses have sold for in the past year in the neighborhood.”
    Buyers might even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd, Gaylord said. That way, they can detail what they like about the house but express fear of future dropping values.
Prepare for rejection or negotiation
    Ultimately, a real estate agent working on behalf of a buyer needs to honor and facilitate the offer the buyer wishes to make; even if it seems to be too low.
    Gaylord offers a word of warning to buyers making very low offers, pointing out that the seller might refuse to negotiate. On a “super-aggressive offer, there’s a one-in-five chance there will be a positive response.”
    Still, there’s that potential for a seller to counteroffer, especially if there haven’t been many other bids. Danielle Kennedy, a real estate sales coach and author based in Pacific Palisades, Calif., advises sellers not to think of a low offer as an insult but as “a sign of interest.”
    “And it begins the dialogue regarding the purchase of your house,” she said. “They should make every effort to be grateful that an offer has come in.”
    Also, not all hope is lost if a seller doesn’t bite immediately.
    Sometimes after time elapses, the seller comes around and decides to negotiate, Boyd said. Or new information — such as the sale of a comparable home at a lower price — can nudge a seller to give an aggressive offer a second look and open the negotiation process.