The first thing to consider prior to making an offer or starting negotiations, is the state of the market as this is likely to influence your ability to “get a good deal”. If you’re in a “buyer’s market” when conditions typically favour buyers because of greater supply and less demand then your chances are going to be good. However, if you’re buying in a “seller’s market” when there are a shortage of homes for sale and plenty of active buyers then it is likely you’re going to have to be more flexible with your negotiations or face missing out to a more competitive buyer.
The second factor to consider is your situation. Have you been looking for months with no success or have you just begun your property search? Have you already sold and a looming settlement deadline is fast approaching? In this instance, you may want to make an offer immediately and at the full asking price. If you’re in no hurry and under no pressure, then this is a great opportunity to negotiate the lowest price possible.
If you find a home you love it is a good idea to let the agent know you’re interested so he will include you in any negotiations should another party also be interested in the same property. However, it is best to keep your emotions to yourself. Expressing interest and asking questions is the right thing to do. Being too eager and desperate will potentially put you in a weaker position to make a low offer.
Always put your offer in writing to the agent so they can formally present it to the vendor. This shows the vendor you are serious about buying and opens up the negotiations. Ask the agent to get back to you within a designated period of time whether they have a response from the vendor or not, for example within 24 hours. This also shows you mean business and are willing to walk away.
If your offer has been verbally accepted by the vendor, this does not mean it is a done deal. Until legally binding contracts have been signed (a process which differs from state to state), the property is still for sale and open to other offers. Be sure to ask your real estate agent to give you the opportunity to make a counter bid if another offer is received. The agent is not obliged to disclose this offer to you. This is when negotiations become difficult and you may need to come in with your top price, as well as be prepared to walk away from the property.