There’s a little bit of an art to writing an offer. Write it too low and the seller is offended. Offended people don’t mind shooting themselves in the foot as long as they get to shoot you in the foot too. Write it too high, and you might leave some cash on the table.
I think it all starts will knowing what the place is worth. That in itself is part science and part gut. The science part is essentially just looking at comps and cutting/pasting the differences between the subject property and the recent sales. The gut part is knowing how buyers will perceive the house. There are a lot of examples of appraisals coming in higher or lower than what the sale price was. An appraiser makes no adjustment for things like a steep driveway, a bad view, ugly carpet, lack of natural light, the neighbor’s deck being too close, etc. Buyers determine value by how they feel inside a house as much as they do square footage and features.
So once I get past all that, I look at how well the listing was presented, how long it has been on the market, if it has been on the market before and didn’t sell…..and also who the listing agent is. A poorly presented listing isn’t going to pull in the buyers. Lots of days on the market usually means something is wrong, being on the market before and not selling usually means an unrealistic seller or a seller who really needs to move and hasn’t had an offer yet. Aaaaaaaaand some agents are better at negotiating than others.
I recently sold two properties where my buyers got pretty good deals because of my gut:
One of them was priced about $10k too high. It was a house that could actually be worth more than the listing price, but needed just about everything cosmetically. It was priced between retail and foreclosure price. That means it won’t attract retail buyers since they typically don’t want to take on the work. It won’t attract investors either since there was not enough money to be made flipping it. My gut was that it had gotten a lot of showings but no offers. We write an offer that I thought was low enough to take serious but not so low that it was counterproductive. The buyer and I both expected the seller to counter for more, but she did not. BAM! Sold!!
The next one was a house that had been off and on the market for a while. The price wasn’t bad really, it just did not show well…..which is realtor speak for a when a house may be nice but you can’t tell it because the occupant is sloppy. It is in a complex of identical townhouses, so it was super easy to figure out what the place should be worth. My buyer could see past the clutter and barking dogs in their kennels. We wrote an offer. The seller wanted to counter it for a few thousand more. I implied that my buyer could not go higher. BAM! Sold!!
And I can do it again.