The Art of the Offer: How To Submit A Bid
All too often I receive offers from brokers and buyers that tell me nothing more than the amount of money they are willing to pay for the apartment. This is not a problem if you are willing to pay whatever is necessary to close the deal but the reality is that money is only a portion of the negotiation, especially with coops that require board approval. After all, my job is not only to get the highest offer possible but to also get the most qualified offer possible! Presenting my seller with an unqualified/not serious bid is simply a waste of their time and energy.
My Advice: Put all your cards on the table without disclosing how high you are willing to go to get a deal done. Here are a few ideas:
1. Always put the initial offer in writing: Type it up if possible to make it appear more credible.
2. Paint a solid financial picture of yourself: List your company name, job position, time with firm, salary & bonus.
3. Include how much down you are willing to pay: Back this up with a Pre-Approval letter from your mortgage lender.
4. When can you sign a contract: Include the amount of time you will need in order to produce an executed contract and usual 10% deposit (I would suggest hours not days; i.e. 72-96 hours).
5. Include when you can close: Sellers love a quick closing date (i.e. 30-45 days from contract signing).
6. Explain your offer with facts: Recent comparable sales, renovations, views/sunlight, location, etc.. Let them know that 'you know' whats going on in the building and surrounding neighborhood!
7. Let them know you are serious: Go ahead and state that you are 'ready to go' and that a timely response would be appreciated.
If the broker or seller asks you for more information after reviewing your offer, which obviously means that they are willing to work with you, give them what they ask for and present that in the best possible light.
Stay firm; don't be afraid to be patient and best of luck!!
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Comments (5)
I think in this situation you're asking the buyer to put all his cards on the table, while the seller can just sit and pick and choose. This is a negotiation process, and the financial information I give out can easily be used against me in this process. If I can put down 50% of my price and have a high salary, I seriously doubt any seller is going to take my first offer.
I enjoy your site, but I consistently see you asking buyers to do things that are completely contrary to their interests so that the seller can have an easier time. This may be a good tack in a hot market, but if the market continues to cool, I think the hoops you are asking buyers to jump through will go away.
Posted by Bing | September 1, 2006 5:25 PM
Bing, The idea is to offer a seller something enticing even though your monetary offer may not exactly be "thrilling". By disclosing important financial information a seller may consider a bid serious that otherwise would be ignored. This is an initial bid so keep in mind that no one accepts the first offer. Buyers definitely have more negotiation power in today's market but it's still New York City
Posted by Brady | September 6, 2006 11:45 PM
i don't think buyers would be comfortable to state their salaries. I think giving proof that they have a source of income is enough.
Posted by patricia | September 8, 2006 9:06 PM
Does anyone know anything about this company called PropertyShark.com. I just read an article in the New York Times: http://www.nytimes.com/2006/09/10/realestate/keymagazine/910shark.html?ex=1158552000&en=625783ef4bb74858&ei=5070&emc=eta1
Sounds pretty cool but has anyone here used the site? If the market cools off there may be some real opportunities in the distressed properties indistry. Any thoughts?
Posted by Mansfield | September 12, 2006 11:35 PM
Patricia you have to realize that in NYC may buildings are co-ops and potential owners have to meet certain income and/or asset requirements in order to purchase the building.
If a buyer doesn't disclose his/her financial info ahead of time the sellers are wasting their time. Coops take a while to close and too many deals have fallen through due to lack of accurate info.
In some cases a seller is better of taking a lower offer from a buyer who has a better financial situation.
Posted by DowntownGal | October 3, 2006 6:45 PM