A Common Misconception When Buying a Home

After looking at several homes you finally find ‘the one’. You’ve spent enough time shopping around so you feel you have a good understanding of prices and you’re ready to make an offer.
How exciting!
It’s an aggressive market and you’ve heard all the horror stories of how people have lost out by not offering enough money so you decide to offer the seller list price.
And they turn you down flat.

How could they? I’ve agreed to pay what they are asking so don’t they have to take my offer?
The list price is simply an “Invitation to Treat”. This is defined as
…an expression of willingness to negotiate. A person making an invitation to treat does not intend to be bound as soon as it is accepted by the person to whom the statement is addressed.
We tend to label the list price as the ‘asking price’ and believe it or not, nowhere in the land of legal jargon in Real Estate is there anything that is called an ‘asking price’.

So you could make a full price offer and the Seller could come back with a counter offer even higher than the list price. It’s shocking, it’s annoying, and it’s been known to happen. Especially in a hot market such as the one we’re in right now.

When making an offer it’s important to be knowledgeable and strategic. Yes, most of the time money talks, but sometimes it’s the terms that create an agreement. Find out what’s important to the other side and work to come to an agreement on those terms.
Never compromise beyond the limits you’ve set for yourself until you’ve completely weighed out all the options. It’s easy for ego to come into play in these situations and to get caught up more on the win than what’s logical. It’s better to move on than to force a sub-par agreement.