Knowing 1 or 2 negotiating tips can be particularly helpful in the negotiating process when buying a new home. Most home buyers know we are in a down market and many house purchasers think you can buy a home for nickels on the buck in a down market. Frequently you can, however it isn't always true.
You have got to know how the house is priced. If a home is listed at around about $300,000 a majority of home purchasers right away want to throw out an offer for $250,000 for the home. You have say to yourself how much is the home worth? How long has it been listed for?. Who is the seller and why at they selling? What do they owe?
You want your real estate agent to complete a CMA on the house. There are possibly a lot of other shoppers in your price bracket looking in the same vicinity. Let's assume the compartive market anaylis returns and shows that the home is under valued and you see lots of Realtors cards in the home. There could be other buyers circling round the the house to place an offer. Have your real estate agent call the sellers agent to work out if there are any other offers before putting in your offer. If there are, then you will have to put in an offer at full price with an escalation clause.
If the CMA shows the home to be priced up at market price then you can sometimes start your offer at about 10% under without upsetting the sellers. If you go seriously lower, sellers have a tendency to get irritated and it turns more into a who's likely to win the game instead of being about purchasing or selling a new home. If a client puts an offer in on a $300,000 home for $200,000 the seller would likely counter higher towards the $300,000 or not answer back to the offer at all. If you offered 10% less at $270,000 the seller might meet halfway at $285,000. This makes a contribution to a discount of 5%. Believe it or not homes selling in the Seattle Washington area are selling for just about 0-5% off of list price. It is crucial to know your market. While the Seattle Real Estate market could be a tiny bit under listed price another market or state could be a good deal different.
If you are dealing with a seller that just won't move on price and the home has been for sale for some time then patience is the key. If the seller really wants to sell the house and no home buyers come along then there will most likely be a price reduction. Make sure you track this home weekly for price drops. I've seen this happen many times where you've got unrealistic seller or a misinformed listing agent that believes they're going to get a certain price and they don't accept or counter back an offer. Months later the home ends up selling for less than they could have got.
If you're putting in an offer on a short sale it's crucial to remember the seller and the listing agent most likely set the price but they won't be the ones taking the loss on the loan. The bank is the one taking the loss and they will be the ones to decide on how much the home will sell for. If the list price on a short sale is $300,000 and it seems like a good deal and you put in an offer for $300,000 and the seller signs off on it, try hard not to get to excited. Months after you get your offer back from the seller, the bank or lien holder will send out their own appraisers and if the home appraises for $400,000 then they are going to counter back to you at roughly $400,000. It can be particularly frustrating to wait months solely to have the bank come back and ask for more cash. You also need to make absolutely sure you don't deposit any earnest money and have all your timelines start on the day the bank accepts your offer in writing.
If you are negotiating on a bank owned home/foreclosure the banks can answer back moderately fast. All banks are different but a good rough guide is they will give you about 3% off listed price. If they don't accept your first offer just show patience because they will sell the home and they generally do price drops about every 30 days or so. Make certain you follow up and track any bank owned homes that you like weekly.
You have got to know how the house is priced. If a home is listed at around about $300,000 a majority of home purchasers right away want to throw out an offer for $250,000 for the home. You have say to yourself how much is the home worth? How long has it been listed for?. Who is the seller and why at they selling? What do they owe?
You want your real estate agent to complete a CMA on the house. There are possibly a lot of other shoppers in your price bracket looking in the same vicinity. Let's assume the compartive market anaylis returns and shows that the home is under valued and you see lots of Realtors cards in the home. There could be other buyers circling round the the house to place an offer. Have your real estate agent call the sellers agent to work out if there are any other offers before putting in your offer. If there are, then you will have to put in an offer at full price with an escalation clause.
If the CMA shows the home to be priced up at market price then you can sometimes start your offer at about 10% under without upsetting the sellers. If you go seriously lower, sellers have a tendency to get irritated and it turns more into a who's likely to win the game instead of being about purchasing or selling a new home. If a client puts an offer in on a $300,000 home for $200,000 the seller would likely counter higher towards the $300,000 or not answer back to the offer at all. If you offered 10% less at $270,000 the seller might meet halfway at $285,000. This makes a contribution to a discount of 5%. Believe it or not homes selling in the Seattle Washington area are selling for just about 0-5% off of list price. It is crucial to know your market. While the Seattle Real Estate market could be a tiny bit under listed price another market or state could be a good deal different.
If you are dealing with a seller that just won't move on price and the home has been for sale for some time then patience is the key. If the seller really wants to sell the house and no home buyers come along then there will most likely be a price reduction. Make sure you track this home weekly for price drops. I've seen this happen many times where you've got unrealistic seller or a misinformed listing agent that believes they're going to get a certain price and they don't accept or counter back an offer. Months later the home ends up selling for less than they could have got.
If you're putting in an offer on a short sale it's crucial to remember the seller and the listing agent most likely set the price but they won't be the ones taking the loss on the loan. The bank is the one taking the loss and they will be the ones to decide on how much the home will sell for. If the list price on a short sale is $300,000 and it seems like a good deal and you put in an offer for $300,000 and the seller signs off on it, try hard not to get to excited. Months after you get your offer back from the seller, the bank or lien holder will send out their own appraisers and if the home appraises for $400,000 then they are going to counter back to you at roughly $400,000. It can be particularly frustrating to wait months solely to have the bank come back and ask for more cash. You also need to make absolutely sure you don't deposit any earnest money and have all your timelines start on the day the bank accepts your offer in writing.
If you are negotiating on a bank owned home/foreclosure the banks can answer back moderately fast. All banks are different but a good rough guide is they will give you about 3% off listed price. If they don't accept your first offer just show patience because they will sell the home and they generally do price drops about every 30 days or so. Make certain you follow up and track any bank owned homes that you like weekly.
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1 comment:
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