Making an Offer
Lesson time 06:19 min
There is an art to the negotiation process. Learn how to make an offer that stands out, build trust with a seller, and avoid losing out on a home you love.
Students give MasterClass an average rating of 4.7 out of 5 stars
Topics include: Do Your Homework · Put in an Offer ASAP! · The Relationship Between Agents Matters · Negotiate Slowly
[MUSIC PLAYING] - When you're thinking about putting an offer on a home, it's so important to know what the listing agent, the agent that represents the seller, what the listing agent strategy is, historically, of listing a home relative to where it sells. You should look at the name of the agent on the listing and then go to other listings that they have sold and see what is the average closing price to list price. That's the way you're going to find out, is this an agent whose strategy is to tend to underprice the listing, create competitive tension and get above, or is it an agent who tends to overprice and let the buyer feel like they're getting a discount. Let's take an example. I'm representing a buyer, I'm an agent. My buyer really likes this home. The home is $1 million. And the buyer says, I really want this home. What should we offer? I would look at the agent who is representing the seller, and I would look over the last three months, six months, and nine months in the platform to see the average sale price relative to list price. So I can see the strategy that that agent usually uses in this market for this property type. For a home with the same number of beds in the same price range. And let's say this home is a two bedroom, and over the last six months, this agent sold 10 homes that were two bedrooms, and those 10 homes have sold at 5% less than the list price that they were listed at. Then I would go to the buyer and say, I know you really want this property. Historically, this agent has overpriced 5% relative to where it actually sells. So let's start off at 6% less and let them bid us up to five, knowing that, on average, it's very likely they're going to want 5% relative to the actual ask price. All right, I feel good about this. [MUSIC PLAYING] Buying a home is an entrepreneurial effort just like any other entrepreneurial effort, and entrepreneurs have to move fast. And so if a home just came on the market and you really like it, go look at it quickly. If you really like this home, then put an offer quickly. I've never understood why buyers-- if there's no offers on a home, why don't they just put an offer? There's no reason not to lease put in an offer. And if anything, it's helpful for the entire real estate market, because if every buyer put in their realistic offer, it gets sellers to become more realistic. It brings people closer to each other, and lets people know where the actual market is. But you can also get lucky, and if this is the offer you would actually-- you would feel good about, then you should put in that offer and it may get accepted. [MUSIC PLAYING] The quality of the relationship between agent matters, because it helps the negotiation. If a seller agent has two bids and they're both equal, let's say $1 million each. One is from a buyer that's unrepresented or that's represented by an agent who's the seller agent's never worked with, they're not going to be ...
About the Instructor
As the CEO and founder of Compass, Robert Reffkin has used modern technology to revolutionize the real estate industry in the U.S. Now he’s demystifying the ins and outs of the American home-buying process and sharing tools that will help you buy or sell a home with confidence. Learn how to approach your search, choose an agent, make an offer, and more. Your future home is waiting—let Robert help you find it.
Featured Masterclass Instructor
Robert Reffkin, the founder and CEO of Compass, helps you get closer to finding your dream home by simplifying and demystifying real estate.Explore the Class