Are low-ball offers a good idea?
Any offer can be presented, but a low-ball one that is extremely less than the asking price can dampen a prospective sale and prevent the seller from negotiating at all. Unless the home for sale is overpriced to begin with, the offer will probably be rejected.
When buying a new home, do your homework before making an offer. Compare prices of recently sold homes and new real estate listings in the neighborhood. It also helps to know something about the seller’s motivation. A lower price with a speedy closing, for example, might motivate a seller who must move, has another house under contract, or must sell quickly for other reasons.
Also recognize that while your low offer in a normal market might be rejected at once, it might motivate the seller in a buyer’s market to either accept it or make a counter-offer.
If you are unconfident in your negotiating strategy, it will certainly be beneficial to speak with an experienced real estate agent or broker.
Can you negotiate interest rates?
Few lenders will negotiate the mortgage rate and number of points on a loan. However, this is more the exception than the rule with established lenders. As always, shop around and know the market before you enter a lender’s office. Rates are often published in local newspapers and on various websites.You may have more luck when dealing directly with the one who is selling a house and has agreed to finance your loan. He or she is likely to be more open to negotiation, particularly when motivated to make a quick sale.
Do I need an attorney to buy a home?
A lot depends on the state where the property is located. Some require an attorney; others do not. Most homebuyers can generally handle routine real estate purchase contracts as long as they read the fine print and understand all the terms. But pay close attention to any clauses, contingencies, and other special considerations that will allow you or the seller to back out of the contract. When in doubt, consult an attorney. Ask relatives and friends or your real estate agent for recommendations. Call to inquire about their fees and to check their level of experience. Expect to pay more when you hire seasoned attorneys. However, in some cases, the peace of mind that can come from working with an experienced attorney or real estate broker can be invaluable.
Does the seller take the furnishings once the home is sold?
Normally. This is because the fixtures – personal property that is permanently attached to a home, such as built-in bookcases or a furnace – automatically stay with the house unless noted otherwise in the sales contract. Anything that is not nailed down is negotiable, including appliances that are not built in, such as washers and dryers.
Is it possible to buy a home below market price?
It is certainly possible to buy a home below market price, but do not hold your breath. It takes a lot of determination and time to find a real bargain. But if you are adamant, here are some likely targets to pursue:
- foreclosed property
- a fixer-upper
- hard-to-sell new homes in a housing development
- tenant-in-common partnerships.
With the latter, you may be able to buy a partial interest in the form of title to property owned by two or more individuals because the partners often sell at a discount. However, bargains are easier to come by in a soft real estate market, when the economy is in a recession, and when homeowners, builders, and sponsors of condominium conversions are desperate to move unsold units.
What are some negotiating tips?
Know the home seller’s motivation to sell. This will enhance your negotiating position as a homebuyer. Sellers who must move quickly due to a job transfer, divorce, or contract on another home are more inclined to accept a lower price to speed the process along.
Remember, too, that the real estate listing or asking price is what the seller would like to receive for the home. It is not necessarily what the seller will settle for. So know the value. Before you make an offer on a new home for sale, check recent sales and listing prices of comparable neighborhood homes and compare them to the seller’s asking price.
- Be flexible. Never say, “take it or leave it.” That can sour negotiations and ruin the deal.
- Never show your hand or reveal your next step.
- Each time you increase your offering price ask for something in return, such as repairs, appliances, even lawn furniture.
- If you plan to pay cash or have a tentative commitment for a loan, use your strong financial position as a negotiating tool.
- Don’t let emotions such as pride, fear, love, and anger get in the way of negotiating the best deal. Leave irrational feelings at home.
If you feel you are unable to do these things, it may be in your best interest to work with an experienced real estate agent or real estate broker.
What contingencies should appear in the offer?
When you are looking to buy a home, anticipate potential problems. But protect against them so that if something does go wrong, you can cancel the contract without penalty. This is what contingencies allow you to do. They should be included in any offer you present to buy a home. Most offers include two standard contingencies: a financing contingency, which makes the sale dependent on your ability to obtain a loan commitment from a lender, and an inspection contingency, which allows you to have a professional inspect the property. Without contingencies, a buyer could forfeit his deposit under certain circumstances if he backs out of a real estate deal.
The purchase contract also should include the home seller’s responsibilities, such as passing clear title, maintaining the property in its present condition until closing, and making any agreed-upon repairs.