Sometimes prospects will have a Prequalification letter from a mortgage
broker. This is merely an estimate of what a prospective home buyer can afford.
A loan officer will base this on information that the prospect himself/herself provides
and while it might be better than nothing, affords you very little protection.
Hint: A prequalification is only as good as the information provided by the buyer
to the loan officer. In other words, a prequalification may be based only the buyer's word -
meaning that he could have told the broker that he once bought the Brooklyn Bridge.
While with a preapproval, the loan officer would have checked to make sure that deed
to the Bridge was real.
You Have Your First Offer
Now the fun begins. The ball is in your court. It's up to you to decide how you want to respond.
Martha's Rule Of Real Estate:
Your first offer is often your best offer. Actually, the whole rule is: The first person
making you an offer, may, after negotiating, bring you the best offer.
Human nature being what it is, if you get an offer of "X" dollars right off the bat,
you are going to figure that you'll get X + dollars if you wait until tomorrow.
Sometimes this happens, but here is why it usually doesn't: When a house is new on the market,
that's when the really motivated buyers will come. It is going to be these buyers' offers that
will most often be the best you are going to get.
My Advice: Work with it. Don't blow it.
Counteroffer
If you get an offer for your asking price, there is sure to be a little voice whispering in your
ear, "I priced it too low." If you get an offer substantially below your asking price and accept
it, those little voices will turn their attention to your buyer, telling him he overpaid. Both you
and your buyer each can feel like successful negotiators who have hammered out the best deal for
themselves, if there is a good offer, which leads to a counteroffer and perhaps a couple of back
and forths until some middle ground is reached.
It is an old saying that you can tell a successful negotiation because both sides are unhappy.
I believe that a successful negotiation is one where both sides are satisfied that they did the
best possible job and neither feels taken advantage of. When a seller wants to sell and a buyer
wants to buy, successful negotiations can happen.
Okay you lucky folks, I'll show you how I do it. I'm a very visual person so I'll show you how
I chart offers. It works for me and it will work for you.
Martha's Surefire Negotiation Chart
Negotiation ABC's - The Basics
Real Estate Contract ABC's
