From Average Joe to Expert Negotiator: 4 Ways to their Attention

I’m just an Average Joe, odds are if you’re reading this then you are too. The reason this site exists, in fact the reason I exist, is to educate people. Specifically those who have NO IDEA where to begin. That said, let’s go through a few helpful tips you can use when it comes to submitting/negotiating an offer that will help you stand out to the seller.

1. Secure financing BEFORE you submit an offer- This may seem like a no brainer, even for an Average Joe, however in the “heat of the moment” people will submit impulsive offers only to later find out they actually have to PROVE that they can pay for the house. Weird concept isn’t it?

You want to get pre-approved, NOT pre-qualified. A pre-approval is a guarantee of funds and allows you to begin submitting offers on homes the day you receive it. A pre-qualification is just an excuse to run your credit and is not worth its weight in paper (You can get a pre-approval online here).

YOU NEED FINANCING TO HAVE YOUR OFFER ACCEPTED!

2. Offer a cash incentive if they accept your offer- A bank will not finance more than what a property is worth. Appraisers now-a-days are very conservative when it comes to the value of homes they evaluate.

This is advantageous because you can submit an offer for what a seller is asking for their property (which looks good) while at the same time offering to pay an incentive should the value come in lower.

For example, a seller is asking $125,000 for a house. After discussing with my real estate agent we believe it will appraise for $110,000. I submit an offer for $125,000 stating that if the property appraises for less than my offer, I will give them $2,000 above what the appraisal is in CASH. The property appraises for $115,000 (which is all the bank will finance) and I give a check for $2,000 as agreed.

There could be multiple offers on this property but the fact that I am offering CASH is hard to ignore.

Score another point for Average Joe.

3. Don’t request seller concessions- Meaning, if you have a big enough nest egg to cover your own closing costs it would be wise to not ask the seller of the property to pay for them.

Additionally, there are programs such as CHDAP or other Down Payment Programs (See my Down Payment Assistance Programs page) that can help you make up the difference for paying your own closing costs.

4. Promise the seller their money FAST- As I mentioned in step 2, cash is hard to ignore. Make sure your lender can close escrow within 30 days. Something that I have found effective is writing “WILL CLOSE WITHIN 21 DAYS” on the offer.

Clear this with your lender first (See “Your Loan Is Like A Cookie“) and be sure that they can give you a written statement attesting to the fact that they can close within 21 days (FYI, it’s not impossible, most loans I process close within 21 days).

The Bottom Line is This: The more tools in your red Average Joe toolbox, the better equipped you’ll be to handle this market. Then again, tools are only as good as their handlers. Be sure you hire a good Realtor(R) and lender, they’re going to be crucial in taking you from “Average Joe” to “Expert Negotiator”.