If you’re looking to buy a piece of Edmonton real estate in the near future, you’re probably planning out strategies you can use to get the best possible price on your ideal home. Buying a starter or move-up home can include lots of different costs, which is why negotiating for the lowest possible selling price is always in your best interest. A lower selling price will give you more room in your budget for repairs or renovations, closing costs, and furnishings. But if you’re planning to low ball a seller, you’ll want to take some steps to make your offer more appealing. Low balling puts you at a disadvantage in a bidding war and could even offend the seller – but with these smart low balling strategies, you’ll have a much better chance of getting your home at your preferred price.
Offer to Handle Repairs and Closing Costs
When buying a home, the buyer and seller usually negotiate who is going to pay for repairs and closing costs. Most buyers who make higher offers will try to convince the seller to pay these expenses. That means if you’re planning to make a low ball offer, you can make your offer more attractive by volunteering to foot the bill. Arrange for an information-only home inspection so you know what needs to be repaired, and then, if the repairs are within your budget, offer to cover the costs. Usually, the seller will cover closing costs – like brokerage fees. But if you’re low-balling, you can offer to pay these costs to better compete with other buyers.
Include an Escalation Clause
If you make a low ball offer on a hot ticket property, it’s a virtual certainty that you’ll be outbid. And although a straight low ball offer won’t win you any points with the seller and will certainly cause you to lose a bidding war, you can put up a fair fight for the home by including an escalation clause with your offer. Essentially, an escalation clause is a clause in a real estate offer that increases the amount of your offer in the event that you get outbid. For instance, if you offer $300,000 for a home and you have a $2,500 escalation clause, you’ll pay up to $2,500 more than the highest competing offer, up to a maximum value that you decide. So if another party offers $350,000, your $300,000 offer will automatically increase to $352,500.
Know the Home’s Fair Market Value
In real estate, knowledge is power. Some overzealous sellers will try to get more for their property than it is actually worth – not out of greed, but out of sentimentality. And if that’s the case, then low-balling can work quite well if you’re armed with hard facts and statistics. For this to work, you’ll need to dig up home sales statistics over the past year for the neighbourhood where your potential new home is located. You’ll also want to get an independent appraisal to determine how much the home is objectively worth. If the seller is asking for more than fair market value, you can back up your low ball offer with sales statistics and make a strong case that they’ll have a very difficult time getting what they want for the home. Making a low ball offer isn’t easy, but it can be successful if you use the right strategies. With an Edmonton real estate agent on your side, you’ll have an expert negotiator who can help you get your new home for below asking price. And when you successfully low ball a property, you’ll have plenty of extra money left over to make it your own.