Negotiating The Contract
The point at which a Buyer finds a home and makes the decision to make an offer on it is probably the most stressful and exciting time of the homebuying process. The biggest decision has already been made. The Buyer wants to live in this home and make it a part of their lifestyle.
The second biggest decision is how much the Buyer is willing to pay and how much the Seller is willing to take for it. The Buyer is in the best position to determine what the home is really worth. He has seen dozens of homes and compared them, evaluating all the important criteria: price, location and condition and found that this is the home that will best suit his needs. With everything taken into account, he feels this home is the best deal for him. The Buyer's Agent will want the Buyer to be able to purchase this home under the most favorable terms and the Listing Agent will want the Seller to sell his home under the most favorable terms.
Negotiating the contract is an art, not a science. There are no hard and fast rules, but we always play fair. There are many factors that will determine what the first offer will be. How does the asking price compare to other recent sales? How long has the home been on the market? How motivated is the Seller? Neither party can have too much information. The Buyer will know the sales comparables, how long it has been listed, and the assessed valuation for tax purposes. The Buyer will evaluate the Seller's Disclosure Statement and compare to their own observations, noting deferred maintenance and undisclosed latent defects. If the home has been listed a long time or if it is priced fairly, but the paint or carpet is poor or if the Seller has vacated or has a new home ready to move in to, then that might be a cause to make a lower offer. If the home is in pristine condition and is a brand new listing, then the Buyer might make a higher offer. Whether or not the Buyer is able to purchase the home at a substantial discount does not determine whether or not they got a good deal, only that they are happy with the final negotiated price. The Seller is happy if the sale helps him achieve his goals.
The actual offer is always a written offer, prepared on the Standard Residential Sales Agreement approved by the Florida Board of Realtors, which most real estate companies use. The written offer is then presented directly to the Seller with their agent present or presented to the Seller's agent for presentation by them. In our modern information technology age, it is common for the offer to be faxed. The Seller may do one of four things with the offer: accept it, reject it, not respond to it at all or make a counteroffer. Less than 5% of all offers are accepted as written and likewise, less than 5% are rejected outright.
