Thursday, March 21, 2019

8 Simple Rules for Negotiating Your Offer and Getting That House

8 Simple Rules for Negotiating Your Offer and Getting That House
Getting That House.

8 Simple Rules for Negotiating Your Offer and Getting That House


You and your agent are going to use everything you’ve learned to seal the deal.


Here’s the dream: Your offer is perfect, you don’t need to negotiate, and you can spend the next few weeks addressing more pressing home-ownership questions, like “Why is it called wainscoting?” and “Do I want a new couch in blush or emerald green?”

And it could happen. Many sellers accept the best offer they receive, and for a variety of reasons.
 
But sellers are also known to reject offers for a variety of reasons. Or make counteroffers. This is especially likely if you bid low, or when you’re up against multiple competing offers.

If you do receive a counteroffer, it’s up to you to decide whether you want to accept the new contract, negotiate the terms, or walk away.

In cases such as these, look to your agent. He or she is your spirit guide. If you decide you want to negotiate — that is, make a counteroffer to the seller’s counteroffer — your agent will use their negotiating skills to help get you the best deal. This is what agents do every day.

But you’re not just going to sit there. If you understand what negotiating tactics your agent may deploy — they depend on the local market and your position — you can back them up. And cheer them on.


Here are eight rules every buyer should know before they — and their agent — start negotiating:

#1 Act Fast — Like, Now


When you receive a counteroffer, you should respond quickly — ideally within 24 hours. The longer you wait, the more space you leave for another buyer to swoop in and nab the property. Also? If a seller senses hesitation, they may decide to withdraw their counteroffer before you even have a chance to respond.

#2 Raise Your Price (Within Reason)


While you obviously don’t want to overpay for a house, you may have to up the ante — especially if you initially made a lowball offer. Lean on your agent’s expertise to determine how much money you should add to the {{ start_tip 83 }}sales price{{ end_tip }} to make it more enticing to the seller.

Then, through their powers of persuasion, your agent can make the counteroffer look even more attractive by pointing out similarly priced “comps” — recently sold homes in your area that are comparable in terms of square footage and features.

As your agent negotiates, it can feel like things are escalating quickly. It’s stressful. You may feel a sudden urge to do whatever it takes to win.

Before you go overboard, there are two things you must keep in mind:
  1. You can’t exceed the monetary confines of the pre-approved mortgage you received from your lender. 
  2. You shouldn’t overextend your budget.
Because your counteroffer has to be an amount you’re comfortable spending on a home. You want that new house and to keep living your life. Plus: You’re not out of options yet.
Explore More Topics:
What Does "Closing" Mean
Before You Choose a Mortgage Lender, Read These Tips

#3 Increase Your Earnest Money Deposit


Increasing your earnest money deposit (EMD) — the sum of money you put down to prove to the seller you’re serious (i.e., “earnest”) about buying the house — is another way to show the seller you have more skin in the game. A standard EMD is typically 1% to 3% of the sales price of the home. Making a counteroffer with a 3% to 4% deposit could be what you need to persuade the seller to side with you.

#4 Demonstrate Patience About Taking Possession


Depending on the seller’s timetable, changing your proposed possession date — the date you take over the property — could butter them up, too. If the seller wants to stay in the home for a few days after closing, try offering a later possession date. You could also draw up a “rent-back” agreement, meaning the seller pays you rent for staying in the home for a set period of time after the closing date.

#5 Let Go of a Few Contingencies — With Care


Want to give your counteroffer an even bigger boost?
Reduce the number of contingencies you’re asking for. It’s your way of saying, “Hey, look, I have fewer ways to back out,” which gives the seller more reassurance that the deal will close.
But be selective: Some contingencies are too important to give up. A home-inspection contingency — the right to have a home inspection and request repairs — gives you an out if you spot major problems with the home (and protects you from buying a total money pit).
You might waive a termite inspection if you’re in a state where the risk is lower.
But ultimately, waiving contingencies depends on your market, your loan program requirements, your risk tolerance, and the circumstances of the house in question. And if you waive contingencies and then you find a problem, the seller isn’t responsible for fixing it.

#6 Ask for Fewer Concessions


At a mortgage settlement, home buyers have to pay closing costs for taxes, lender’s fees, and title company fees. Closing costs vary by location, but you can expect to shell out between 3% and 4% of the home’s sales price. The seller pays an additional 1% to 3%. (Smart Asset and Nerdwallet have simple calculators you can use to get a rough idea of what your closing costs might be.)
When making an initial offer, you have the option to ask the seller for concessions — a settlement paid in cash to help you offset your share of the closing costs. (This move is less feasible if you’re going up against multiple offers.)
Concessions effectively lower the seller’s net proceeds from the sale. Making a counteroffer that removes the concessions you would have otherwise received at settlement puts cash back in the seller’s pocket — and can improve your bid.

#7 Pick Up the Cost of the Home Warranty


Sometimes sellers offer prospective buyers a home warranty. This is a plan that covers the cost of repairing major home appliances and systems, like the air conditioner or hot water heater, if they break down within a certain period (typically a year after closing).
A basic home warranty costs about $300 to $600 a year, according to Angie’s List. If it seems like waiving the home warranty can sweeten negotiations, but you still want the peace of mind of having one, tell the seller they don’t need to cover it — then buy it yourself.
Just keep in mind, whether you or the seller buy the warranty, you’ll need to pay the service fee (typically between $50 and $100) if something does, indeed, need to be repaired while under warranty.
Also, FYI: A home warranty is entirely separate from homeowners insurance. Homeowners insurance — the security blanket that covers your home's structure and possessions in the event of a fire, storm, flood, or other accident — is required if you take out a mortgage. It can cost anywhere from $300 to $1,000 per year.

#8 Know When to Walk

 

When negotiating with a seller, trust your gut — and your agent. If he or she says a deal is bad for you: Listen.

And if you don’t want to make any more trade-offs — and the seller won’t budge — it’s smart to walk. That can be a tough decision to make, and rightfully so! Negotiating is tough. It’s draining.

And losing something you’ve worked hard to get can be disappointing. But don’t worry. There’s a better deal for you out there. And after those strong feelings of frustration pass, you’ll realize: Now I know how to do this.

 

17 comments:

  1. Thanks for sharing these negotiations of getting home and it is valuable for the users. Get houses for rent in queens from Home-Mega who provides the multifamily house for sale.

    ReplyDelete
  2. Please let me know if you’re looking for a article writer for your site. You have some really great posts and I feel I would be a good asset. If you ever want to take some of the load off, I’d absolutely love to write some material for your blog in exchange for a link back to mine. Please send me an email if interested. Thank you! best real estate Divorce agents Des Moines Iowa

    ReplyDelete
  3. Debt consolidation plans help to simplify personal finance by combining all of your personal loans and credit card debts into one fixed monthly repayment. Check out details of Consolidation Loan Singapore.

    ReplyDelete
  4. Thanks for taking the time to share this article here about the Home selling. Your article is very informative and I am impressed by the details that you have shared in this post. Keep sharing these types of articles here. real estate broker lead generation

    ReplyDelete
  5. Real estate is the largest sector in terms of investment and many of us are investment properties here. Thanks for letting us drop by here on your blog. :)
    Reference:
    Real Estate Broker
    What to Consider When Buying A Home Requiring Renovation

    ReplyDelete
  6. Great job for publishing such a nice article. Your article isn’t only useful but it is additionally really informative. Thank you because you have been willing to share information with us. Fix Housing Violations

    ReplyDelete
  7. Thanks for sharing such a nice article about house. This article highlighted some important points about real estate. Words are written in an easy understandable laguage. Look out for best Apartments In Odessa.

    ReplyDelete
  8. Enjoy reading the article above , it really explains everything in detail,the article is very interesting and effective.Thank you and good luck for the upcoming articles. Low Income Apartment For Rent in COLORADO

    ReplyDelete
  9. I am very proud to say that your blog has had such useful information about real estate and acceptable content. A knowledgeable blog you have shared. homes in woodside ca.Please keep sharing.

    ReplyDelete
  10. Thanks for publishing such great knowledge. You are doing such a great job. This info is really very helpful for everyone. Keep it up. Thanks. Back Massage.
    https://myrainbowmedia.com/

    ReplyDelete
  11. This is excellent information which is shared by you. This information is meaningful and magnificent for us to increase our knowledge about it. Keep sharing this kind of information. Thank you. house appraisal

    ReplyDelete
  12. As a veteran, I took a VA loan to build my house. Cardinal Financial Company Limited Partnership provided this loan. I contacted the best loan agent of this company whose name is Rae Drake whole helped me to get approval for the loan easily. Thanks, Rae Drake!

    ReplyDelete
  13. This page contains a lot of useful information about home loan Singapore comparison. I'd want to thank everyone who helped to make this valuable post possible. Continue to post.

    ReplyDelete
  14. I generally want quality content and this thing I found in your article. It is beneficial and significant for us. Keep sharing these kinds of articles, Thank you.
    mortgage refinance near me

    ReplyDelete
  15. I'm so glad I stumbled upon your blog post about Rules for Negotiating Your Offer and Getting That House. Your clear explanations and in-depth analysis make it easier for someone like me, who's new to real estate, to understand the complexities. Thanks for sharing your knowledge!

    Apartments for Rent in Montego Bay Jamaica

    ReplyDelete
  16. Positive site, where did u come up with the information on this posting? I have read a few of the articles on your website now, and I really like your style. Thanks a million and please keep up the effective work.
    fha lender nyc

    ReplyDelete