First Offer, Best Offer

When it comes time to negotiate, most folks are conditioned to believe that there are immutable rules that must be followed. What immediately comes to mind is a merchant's stall in Morocco where the buyer and seller smoke a hookah together and banter back and forth until an agreement is made. The seller always starts high and the buyer always counters low. Then the seller comes down a little and the buyer comes up a little until they reach an amiable agreement that benefits both sides. The buyer leaves with his new rug feeling like he got the deal of the century, while the seller chuckles to himself about the rube that overspent on a rug he bought at wholesale. In today's real estate market, it is not that simple.

As a matter of fact, this kind of thinking can have very negative consequences in today's market. It seems like almost every buyer I work with starts out with this mentality and it is very hard to get them to change their way of thinking. Even when a property is priced perfectly, most clients have this idea that they need to start low or they won't be giving themselves the opportunity to make the best deal. They don't want to beak the sacred laws governing the whole process of coming to an agreement. In many cases, this is the wrong approach entirely. You have to take into account the consequences of not acting quickly to wrap up a property you really want to buy. By coming in too low, you will actually cost yourself money. By not putting your best foot forward, you are giving another buyer the opportunity to put in an offer and force a best and final situation. Even worse, if your initial offer was weak and your competitors offer is strong, they may just discount your offer entirely and choose to deal directly with the other buyer. Even though you are willing to go higher, you might not get another shot.

In order to be sure you will get a fighting chance, you need to write an offer knowing that your first offer may be your only shot at buying the property. I always tell my clients to make sure their first offer is something that has a chance of being accepted. If the house you want to buy is priced correctly and is a good deal, a full price offer is always a great way to go. You can wrap the house up right away and take any other buyers out of the equation. I can't begin to tell you how many times I have had buyer's try to cut a couple of grand off a house they really wanted to buy, only to end up having to spend thousands of dollars over the list price because they didn't listen to me. It is even worse when they lose the house entirely to another buyer because the other buyer came in strong and didn't try to nickel and dime the seller. If you want to buy a house that nobody else is remotely interested in, forget everything you have just read. If you want to buy a property that is well priced and will probably garner a great deal of interest, remember that, sometimes, your first offer should be your best offer.