Making an Offer on An Atlanta Georgia Home For Sale: Price Negotiations

SO you found the home that seems “right” for you and your family and you are ready to make an offer on an Atlanta Ga home for sale.

You have made all the right moves so far.

• You talked to a mortgage lender and got pre-qualified for a loan.
• You chose an Atlanta Georgia neighborhood that was convenient to your work and had great schools for the kids.
• Your real estate agent set up a “listing alert” that automatically emailed you listings from the FMLS as soon as they came on the market.  All of these listings met your specific buying criteria including a price between $325,000 and $348,000, 4 bedrooms, level back yard, basement with rec room.
• After sifting through hundreds of homes online you chose five or six of the best ones and went to visit them with your real estate agent.
• After talking it over with your Dad and also with a co-worker who lives in the same neighborhood, you go back and take a second look at the home you really liked.  The house still makes your heart pound.
• You tried the commute to work on a busy weekday morning and the drive only took 12 minutes.

It is time to make an offer to buy. What’s next?

Recognize the market trend.  We are not in the depths of the 2008 mortgage meltdown.  Sellers are not taking offers that are 20% of the list price.  The Atlanta market is in full recovery mode and sellers are expecting offers that are within 10% of the list price.  More often than not the first offer will be countered so expect to be turned down flat if you make a lowball offer.  My sellers are not even making counter offers to buyers who make lowball offers.

Note to buyers: there is 50% less inventory on the market now than there was a year ago.  Supply and demand is now working in the seller’s favor.

On a $330,000 house, an offer below $300,000 would be a “lowball” offer in my honest opinion.  Even though the offer is greater than 90% of list price, the emotional aspect of the offer would anger a seller in today’s market.

I would recommend making an offer at closer to 95% of the list price (say $313,000) and asking the seller to pay closing costs and perhaps a home warranty or HOA fees.  Oh, and being a sharp Realtor, I would include a couple of comps in my email to the listing Broker that gives a “basis” for the offer. Homes in move in condition are attracting offers even closer to list price.

What if the seller counters back at list price…….just keep on walking.  A legit offer where the seller refuses to negotiate shows me the seller is still dealing with “issues” about the market value of his home. Exception: if the seller receives multiple offers, you will probably have to pay list or above.

FORECLOSURES – 

If you are making an offer on a foreclosure, expect to pay list price or above for the home you are considering.  Any foreclosure worth considering is going under contract within days of hitting the market.  Make at least a list price offer and expect to be contacted with a request for your “highest and best” offer.  Note: highest and best pretty much assures you the home is going to sell for more than list price.

SHORT SALES

 are a different animal and there is less certainty about how a lender-asset manager will evaluate your offer.  This is the one area where perhaps, in certain situations, you may want to make a lowball offer.

BUT, you are not going to get an answer to your offer for weeks and probably even months from the time you deliver the offer to the listing broker.  This is a process that tries the patience of all parties involved in the transaction.

DO NOT even consider a short sale unless you have the luxury to wait around for answer that may take six months to come your way.