As a Buyer, how much should I offer? How high should I go?
Try this mental exercise to figure out the right "highest and best" price to offer:
Come up with a purchase price and then imagine finding out the seller decided to accept a different offer. How you would feel?
What if you found out the final price was $5k more than your price? Would you feel disappointed and wish that you would have gone $5k higher? If so then this mental exercise is telling you that your number should be increased by $5k.
On the other hand, if your reaction would be more like- "Well we gave this our best shot and for the higher price I guess it's best that someone else gets it because we feel that we can find a better value if we keep looking."
If your feeling is more like the latter then you are at the right price to offer.
The goal is to figure out a price to offer that really is your "highest and best" and that if a different buyer is willing to pay more than it would be "okay". Sure you wish your offer was accepted but you feel that you "did your best" and that's all you can do and that a better value is still out there.
Then there is the "acceleration clause" where you indicate that you will a certain amount "higher" than the next best offer.
For Example:
"Purchase Price is to be $5,000 more than the next highest Purchase Price offered but our Purchase Price is not to exceed $700,000"
This enables you to set an upper limit but make sure you don't "miss out" to another buyer unless the other buyer goes above your absolute maximum price.
Try this mental exercise to figure out the right "highest and best" price to offer:
Come up with a purchase price and then imagine finding out the seller decided to accept a different offer. How you would feel?
What if you found out the final price was $5k more than your price? Would you feel disappointed and wish that you would have gone $5k higher? If so then this mental exercise is telling you that your number should be increased by $5k.
On the other hand, if your reaction would be more like- "Well we gave this our best shot and for the higher price I guess it's best that someone else gets it because we feel that we can find a better value if we keep looking."
If your feeling is more like the latter then you are at the right price to offer.
The goal is to figure out a price to offer that really is your "highest and best" and that if a different buyer is willing to pay more than it would be "okay". Sure you wish your offer was accepted but you feel that you "did your best" and that's all you can do and that a better value is still out there.
Then there is the "acceleration clause" where you indicate that you will a certain amount "higher" than the next best offer.
For Example:
"Purchase Price is to be $5,000 more than the next highest Purchase Price offered but our Purchase Price is not to exceed $700,000"
This enables you to set an upper limit but make sure you don't "miss out" to another buyer unless the other buyer goes above your absolute maximum price.
