Friday, July 05, 2013

Home Buyer Tips - In a seller's market don't negotiate like you are buying a car!

I recently read an article that discussed buying a home in the new "seller's market."  The strategy of the writer was simply this ...make your first offer your highest and best. 

There may be situations where this approach is appropriate but I would shy away from it as a "fits all" guide to buying a house.

I have seen some use the "buying a house is like buying a car negotiation strategy" only to see a great big rejection (no counteroffer, just a big no!).

There are a few major differences between buying a house and a car besides the amount of money.

First, the nature of the car sales business encourages a low offer with subsequent multiple counters and a final agreement.  I think auto sales folks expect this to be the process.

Secondly, there are hundreds, if not thousands of cars, like the one you are making an offer on.  But that house you want to buy is a one of a kind.  Sure it can be recreated but not in the same location.  And real estate is location, location, location.  Scarcity create demand.

Finally, there are usually not several buyers at the dealership trying to buy that same car at the same time.  Wouldn't a car salesperson love to have several buyers competing for their product!

It is true I would never offer my top price initially for a car nor would I do that for a house.  But I would make a reasonable "let's talk offer."

This is the point where your real estate agent can serve as a key adviser.  Ready to buy a house in Florida?  Call me at 321-693-3850 or email me if I can help.