Tip #22 in our series of 70 ways to save money when buying a house is to put a deadline on all offers.
We do this to force the seller to make a decision. Once the time limit is up the offer is dead, unless you want to revive it. Put yourself in the seller's shoes. You are selling a $200,000 house that has been on the market for 4 months. You want to move but have to wait until the house sells. You get an offer for $175 but have to make up your mind within 24 hours or the buyers could leave. I don't think I would get much sleep in this situation.
This also protects you from other buyers putting in their own offers. Even if there is another couple interested in the house, the seller cannot be sure that they will make an offer. As the saying goes, a bird in one hand is better than two in the bush.
Buyers are notoriously targeted with an agenda by sellers in multiple areas. The lure of the highest price possible, less lenient financial terms, and a cherry on top is sought out by virtually every seller out there on the market. In order to achieve these incentives, sellers will do everything they can to read the buyer and note any sign of urgency. If they find out a buyer is superbly interested in a home, they will do everything to pamper their own terms. One way for buyers to soften the blow is by placing a time limit of 24 hours on all offers and counteroffers.
Buyers must always be cool when purchasing a home. No sense of urgency should be displayed no matter how much you admire the house. By placing a 24 hour seller response time limit on all offers you make, you are swaying the pendulum. In essence, this works by making an offer to the seller and asking him to accept, decline, or counter that offer within 24 hours.
Although this is an excellent tactic in obtaining the best price, it is always important to maintain a cooperative spirit with the seller. When approaching the seller, don't throw out prices and terms off the bat. Listen to all of the seller's points. Remember, getting the best price is the name of the game, and sellers can show bias and preference for one buyer than the other. Although negotiating real estate can be a daunting experience, it doesn't have to be. Always listen carefully to the arguments of the seller.
Of course, it is also important that the seller listens to you as well. A solid negotiating tactic to drive prices down is to carefully remind them of the negative features their home has. Talk about the market and the features the home is in/carries and leave room in your offer for bargaining. Although the price of the home is the single most important aspect, it is important to come to amicable terms when it comes to closing dates, possession dates, escrow, and other similar issues. Also, be realistic. A seller's market will not allow you to negotiate more effectively than a buyer's market would. Placing a time limit of 24 hours on all offers and counteroffers clearly works better in a buyer's market.
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