Presenting Financial Sketch with Offer?

Yes, it's standard, and yes - to some extent - you are arming your enemy.

The seller is not your "enemy" and no you are not arming them. If you are worth $10MM and are buying an apartment you think is worth $100,000, your net worth has nothing to do with negotiations. A seller who holds out because you "can afford to pay more" has a pretty dumb negotiating strategy. And if you plead poverty to keep the price down, you have an equally silly strategy.

A seller is more inclined to accept an offer from a well-qualified buyer even if the offer is nominally less (or even meaningfully less) than an offer from a dubious buyer the board will likely reject. Paint yourself in the light most favorable from the very start. It makes you stronger. Not weaker.

Kylewest: Good point. I was thinking of the opposite scenario: a buyer with marginal financials, who gets held up for a higher bid because "we have a rock-solid buyer in the wings."

As a seller I would never accept an offer unless I felt fairly confident the buyer will pass the board. I would rather take a lower offer from a buyer that is financially qualified than take a higher offer and end up having to list it again after a board turndown.

Kylewest: If you aren't in a competitive bidding situation and the seller is just comparing your offer to what he thinks you should be able to bid and to what he believes his apartment is worth, then an indication of a stronger financial position indicates that you are able to raise your bid.

As a buyer, I have little insight into their financial position (beyond perhaps broker's rumors), so the information is asymetric.

Perhaps calling the seller an "enemy" is extreme, but they are certainly your opposition and a negotiation involving money (admittedly among other things) is a zero-sum game. While I want to adopt a constructive attitude, every additional dollar to them is a dollar from me.

Though the seller's negotiating strategy based on financial information about potential buyers may be "dumb", it is also extremely tempting to hold out for a higher offer that you know that the buyer can meet.

jsw: it is, I suppose, a matter of your negotiating strategy and approach. During my negotiations, I presented myself as both highly qualified (and my summary financial statement showed me to be in a position to purchase a substantially more expensive apartment, btw) and fairly indifferent with marginal patience for nonsense. I knew what I was willing to pay, structured the negotiations accordingly, and closed at just below that price. A seller who thinks they'll extract more from me than the place is worth to me simply because of my financials doesn't know who they are negotiating with.