Buying Smart in Today's Market: Building the Right Offer Strategy

Every buyer's goals are different. Learn how to structure an offer based on your priorities—whether that's a lower monthly payment, reduced cash at closing, or maximizing long-term wealth—and why the right lender and REALTOR® make all the difference.

Transcript

SPEAKER_01 0:00

Welcome back to the final segment of the Idaho Life Show. Garrett Thill and Shelby Matson with Idaho Life Real Estate this morning here in Meridian. And we have been talking about rates, why they're kind of become normal now, what concessions look like, and why waiting for a rate drop is actually more expensive than most buyers realize. Now I want to land the plane here on a strategy. The conversation that we have with every single buyer who walks through our doors here at Ho Life Real Estate to have consultations with you or any of our agents, Shelby.

SPEAKER_00 0:32

Yes, and this is what changes the outcome of a deal. Because most buyers in this market and most agents, honestly, they get fixated on the price, the number. They want to negotiate the price down. And sometimes that is that is the right move, but sometimes it is absolutely not.

SPEAKER_01 0:52

That's right. And the very first question I know that you and our agents are asking the buyers, you know, when they're looking at making an offer, what matters most to you? You know, what matters most to you? Are you trying to keep your monthly payment as low as possible? Are you trying to come into the table, you know, at closing with the least amount of cash out of pocket? Are you trying to maximize your long-term wealth on this property? Because the answer on what they give you, Shelby, it changes the strategy of the offer.

SPEAKER_00 1:20

It does. And it should change the strategy of us negotiating the offer. Because if your number one priority is the monthly payment, fighting for a $15,000 price reduction is the absolute wrong move. But it seems seems right.

SPEAKER_01 1:34

But let's let's actually run that. So a $15,000 price reduction on a $450,000 house at today's rates is somewhere around $90,000 to $100 a month on the payment. Yeah, that's it. Not nothing terrible.

SPEAKER_00 1:46

Versus taking that same $15,000 as a concession and putting it into a two-one buy down. And now you are saving saving $500 plus a month in year one alone. It's a lot. It's a lot of money. Six times the monthly savings, same dollars from the seller, completely different outcome.

SPEAKER_01 2:07

Yeah, same dollar amount from the seller help. It's just how we kind of use that. And it's really a wildly different result for the buyer. And that's why this conversation matters so much.

SPEAKER_00 2:18

Now, there is a flip side. If your priority is long-term equity and you're going to be in the house for 15, 20, let's say 30 years, a price reduction is permanently lower principal. You're paying interest on a smaller loan amount for the entire life of the loan.

unknown 2:34

Yeah.

SPEAKER_01 2:35

And you can potentially refinance the rate later again, if the interest rate market does improve, but you cannot unpay the price, right? So in that scenario, fighting for the lower price is actually can be the right move.

SPEAKER_00 2:50

It can be. And if your priority is getting the closing table getting to the closing table without draining your savings, concessions toward closing costs is the right play. You don't even need a buy down. You just need cash that doesn't come out of your own account at closing.

SPEAKER_01 3:05

Yeah, which is why this conversation matters so much before the deal even gets written up. Because the answers that we have with with you as the buyer really determine on how we structure the deal. And that's just the conversation that's not happening up front. We like to do that right out of the gate so we know exactly how to negotiate for you as the buyer.

SPEAKER_00 3:25

And we ask every single buyer this question. Every single one. Before we write a single offer, we walk through what the actual win looks like for them. Is the win a low payment for the next 24 months while you settle into the house? Is the win bringing 12 grand to closing instead of 20? Is the win sleeping at night because you got the property 30 under list? They are all different answers and they are all completely valid.

SPEAKER_01 3:50

Very valid. Very, very different situations there. And the buyer knows their answer writes a fundamentally different offer than the buyer who hasn't thought about it. And that's okay. You know, the buyer who has done the work walks in with a clear ask, and the deal gets structured around that ask. And the buyer who hasn't ends up kind of just copying whatever feels normal, and the offer doesn't optimize for anything in particular.

SPEAKER_00 4:17

And here's the part that nobody talks about. You don't strategize this alone with your agent. You strategize it with your lender at the table at the same time. That is the move.

SPEAKER_01 4:28

That is huge because your lender is the one that's actually running the payment numbers. We're not doing that, you know, as the as the agents at Ho Life Real Estate. They're the one, that lender, that trusted lender, they're the one who can show you side by side. Here's what the offer looks like with a $15,000 price reduction. Here's what it looks with a $15,000 buy down, and here's what it looks like, you know, split between, maybe you can even split it, right? Between closing costs and buy down.

SPEAKER_00 4:54

For sure. And we get our lenders on the speakerphone with the buyer at the table. We pull up the loan estimate side by side, and the lender and the buyers compare three or four versions of the same offer. And we let the buyer feel the difference in real numbers before we ever pick up a pen.

SPEAKER_01 5:10

That's I I love that. I think it's so important. It just makes them feel so much more comfortable knowing they're making the right decision and they have options and they're the ones deciding on that. And uh really, that is the difference between working with an experienced agent who has a team behind them that has done thousands of deals and somebody who's going to write an up an offer on, you know, whatever the buyer just kind of instinctively asks for, saying, hey, negotiate some money, you know, off the price of the house.

SPEAKER_00 5:33

Right. Because the buyer's instinct is almost always to negotiate the price. And I totally get that. I really do. We grew up watching our parents negotiate prices on cars and on houses. And the price is one lever. But in this market, with rates where they are in the new norm, concessions are often a more powerful lever.

SPEAKER_01 5:54

There's multiple levers on that. That's the that is the key part, it's not just one.

SPEAKER_00 5:57

That's right.

SPEAKER_01 5:58

So here's the other thing. And I want to spend a couple minutes, if you're okay with this, Shelby. When we have this conversation with the buyer, we're also asking, you know, what does the seller need? Because the strongest offers are the ones where the buyer gets what they need and the seller, they also get what they need.

SPEAKER_00 6:14

Yeah. And if the seller has a higher price stuck in their head for emotional reasons, of course, for net proceeds reasons, because they have to clear a certain number to pay off their mortgage, sometimes meeting them at their price and getting a concession back is a better play than finding them on the actual price.

SPEAKER_01 6:31

Absolutely true. So true. It can be an emotional, kind of a psychological effect. You know, they they get to feel good about hitting their number. You also get dollars back as a credit. Everyone walks away with what they actually needed.

SPEAKER_00 6:43

Yeah. And in this market, which is more balanced than it has been in years, sellers are very open to that conversation. I mean, yes, the homes that we repriced well and and marketed really well can sell in a weekend. But sellers want to get their house sold. They will negotiate, they will give concessions, they will work a str with a strong buyer. Yeah.

SPEAKER_01 7:05

Now I want to take a minute here for the lender side of this because you need the lender who can do buy downs. And not every lender quotes them up front. Not every lender even brings them up. And if your lender is just quitting you on a rate and a payment and never mentioning the concession structures, you might want to get another opinion on that.

SPEAKER_00 7:23

I totally agree. That is one of the most important pieces to this puzzle. We have lenders we work with every single week, local treasure Treasure Valley lenders who know exactly how to structure these deals, who will sit at our table with the buyer and run three different versions of the same offer in real time. That is who you want on your team.

SPEAKER_01 7:43

I love that so much. I absolutely love it. Just we get real strategic about it. And it's a it's a team, you know? It's not just you, Shelby, and your buyer, but getting a lender involved and a whole team around the buyer really helps them. And it it doesn't cost you anything else to work with a great lender. I mean, the fees are the same relatively, the terms are gonna be the same. The difference is whether they actually know how to present you with options, you know, laying out those four different options that we talked about, or whether they just, here you go, here's your payment and a number based upon you know the price that you're gonna be offering.

SPEAKER_00 8:15

If you're working with an agent who has been doing this for 15 years and a lender who has been doing it for 15 years, the conversation in the kitchen sounds completely different than what most buyers experience. There are several stat strategies on the table, not just one.

SPEAKER_01 8:31

Yeah. And which is the moment I want to kind of leave listeners with here. This is the market that rewards the prepared buyer. Right? The buyer who has talked to a lender, the buyer who has talked to an agent who knows how to structure an offer, the buyer who knows what they actually want, the price, the payment, the cash to close, the long-term wealth, and writes an offer that goes along with that thing specifically.

SPEAKER_00 8:58

If you are sitting at home thinking about buying or thinking about waiting, call us. Sit down with us, let us run the math for you with our lenders. Let us show you what a concession structured offer actually looks like on the kind of house you'd be buying.

SPEAKER_01 9:15

And there's no obligation, that's the beauty of it. There's no pressure. We're here to tell the truth. Right. And if the answer is you need six more months, we'll tell you that. That's okay. Yeah. If the answer is, you know, you should, you know, you should have done this last year, we'll we'll be honest and tell you that as well. There's no, you know, one answer for for everyone. We're not going to tell everyone that now is the right time to buy, but it is worth the call to speak with Shelby, to speak with any of the agents at Idaho Life Real Estate. It's worth your time to be prepared ahead of time.

SPEAKER_00 9:48

We don't want to keep you paying rent and waiting on a rate that may never come. When there is a smarter place sitting on the table that nobody has shown you, we really, really need to just talk it through and see what works best for you.

SPEAKER_01 10:02

I I love that. So I think this has been a great conversation. Really, hopefully, we open up some buyers' eyes that it's not just about negotiating the price. It's it's you have concessions and then where to potentially use those those concessions. So talk to your trusted real estate agent, talk to your trusted lender. Thank you guys so much for listening to us today. You've been listening to the Idaho Life Show on K I D O. I'm Garrett Thil with Shelby Matts. And you can search homes anywhere in the Treasure Valley. You can go to easy websites, IdahoLife.com. That's it, IdahoLife.com. You can find every listing here in the Treasure Valley.

SPEAKER_00 10:36

And come find us on Instagram at Idaho Life Real Estate for daily content on the market, on new listings, on the neighborhoods we love. We will see you next Saturday at noon.

SPEAKER_01 10:46

Until then, make it a great Idaho Life.