real estate tips

6 Ways to Lose at Negotiating a House Price

By: Leanne Potts

Real estate negotiation tips so you can buy your dream home — and not overpay.

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You've looked at enough houses to fill an entire season of House Hunters and finally picked one to buy. Now you're ready to make an offer.

Your agent can help guide you through this nail-biting phase of negotiating a house price, but ultimately, you call the shots. Here's how to negotiate like a boss.

Fail #1: Thinking House Price is All That Matters

That house with a price point $15k below your budget? It may seem like a deal — until you add on the costs of maintenance and replacing the aging appliances.

Planning on repainting, remodeling, or landscaping, too? Suddenly the price looks a whole lot higher.

When developing your offer, calculate in the costs that will go above and beyond a mortgage payment. Then you can negotiate with an eye on the total cost of owning the house, not just the sticker price.

On the flip side, the price may not be all that matters to the seller, either.

She may have to start a job on the other side of the country in a month and value a quick closing. Or she may be looking to rent from you for a bit after the sale until her next home is ready. Sometimes being accommodating is negotiation gold.

Fail #2: Refusing to Back Down on Small Repairs

Before you draw a line in the negotiation sand over, say, a deck with some rotten boards, ask yourself if it's worth losing the house over a repair that would cost less than a thousand dollars.

Say the house price is $250,000, which makes that deck repair less than half of one percent of the cost of the house. There's a lot of emotional energy at this point in the process, so give yourself a break rather than dickering over it.

A house negotiation is not about winning for the sake of winning. It's about getting the house you want at a fair price on good terms.

Fail #3: Waiving Formalities Because You're So in Love With the House

Don't be so blinded by house love that you do something silly like skip some of the formalities of home buying, such as the home inspection or the appraisal, in an effort to close the deal.

Those steps, and others like a termite or septic inspection, are known as contingencies. They're there to protect you from ending up with a six-figure money pit.

Imagine how quickly the house-honeymoon would end if you found a termite colony or that the identical house across the street sold for much less?

Besides, if you're taking out a mortgage, your lender won't let you skip an appraisal because they don't want to loan money on a house that isn't worth the loan amount. So even if you want to make it easy for the seller, your lender may stop you.

There are other ways to sweeten your offer and get that house:

  • Pay some of the seller's closing costs.
  • Offer a fast close.

If this is your first house, speed is an ace up your sleeve because you can move faster than someone who can't buy a new house until they sell the old one (another type of contingency).

And remember, while there's a lot of emotion tied up in choosing a house, it's still a business deal.

Fail #4: Getting Hung Up On a Few Grand

You offered $198,000. The seller won't budge from $200,000.

Before you walk away, consider this: Two grand is a lot of money, but in the house-buying world it's not so much. At an interest rate of 4%, with 20% down on a 30-year mortgage, that additional $2,000 will add just $8 a month to your payment.

If you can swing it -- maybe you can cut a small thing out of your budget each month -- it could be worth it. 

Fail #5: Folding Because the Inspection Turned Up Issues

A good home inspection is going to turn up something. Usually several somethings. That's good. It means the inspector is doing their job. It's a rare day when a home passes inspection with no problem at all.

Plus, many things that turn up on an inspection are easily handled. You can ask the seller to do the repairs or knock some off the price so you can pay for repairs.

And while some problems may seem scary at first, like a roof leak or plumbing problem, they're almost always fixable and negotiable.

Fail #6: Offering Less Because the Decor is Hideous

The faux-Tiffany swag lamp and trippy orange-and-brown wallpaper make your eyes itch. So you're planning on offering less — way less.

Before you do that, know the market. If it's a seller's market, your offer may be seen as an insult especially if the home's in good shape. And just like that, you've lost your dream home.

When you're ready to make that offer, look past the little stuff that you can easily change, and focus your negotiations on what matters, like the location and the bones of the house.

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6 Ways to Lose at Negotiating a House Price -  https://www.houselogic.com/buy/house-negotiating-closing/negotiating-house-price/

By: Leanne Potts  |  Published: July 12, 2018

Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

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    What Every Seller Needs to Know About Closing

    Walk-throughs, closing costs, and other items to check off your list before the big finish!

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    Closing time. The end of the road. The last hurrah — and hurrahs are in order.

    If you’re here, then you’ve found a buyer, negotiated home repairs, and are ready to move out -- and on. But before you can make this sale official (and get paid!), you still have a few items to cross off your list.

    Here, we’ve laid out everything you need to know to have a successful settlement.

    Closing Is the Final Step

    Closing, or “settlement,” is when both parties sign the final ownership and insurance paperwork, and the buyer becomes the legal owner of the home.

    Typically, closing day takes place about four to six weeks after you signed a purchase and sale agreement. During this window, the buyer’s purchasing funds are held in escrow until all contingencies, like the home inspection contingency and appraisal contingency, are met.

    Your agent will be able to answer questions and offer support through closing. Here’s what to expect from the process, start to finish.

    Before You Close, You’ll Have a Final Walk-Through

    Most sales contracts give the buyer one last chance to do a walk-through of the home within 24 hours of settlement. This is their chance to check that the property is in good condition, and to make sure the agreed-upon repairs were completed. 

    In most cases, no problems arise at this stage of the transaction. (If something is amiss, your agent can walk you through it.) The final walk-through mostly gives buyers peace of mind knowing that you, the seller, have adhered to the conditions of the sales contract and home inspection-related repairs.

    Related Topic: Sell a Home: Step-by-Step

    Follow These Steps to Prepare for the Final Walk-Through

    To help ensure that the walk-through goes smoothly, take these six steps ahead of time to prepare:

    Step #1: Clean house. Your home should be spotless for the final walk-through. Assuming the buyer is taking ownership on closing day, you should be fully moved out at this point. But moving can be messy. After purging, packing, and moving, you may want to do one more deep cleaning. 

    Step #2: Leave owner’s manuals and warranties. Make the buyer’s life easier by providing all manuals and warranties you have for home appliances. Print physical copies and put these documents in one place for the new owner. If you have receipts from contractors for repairs, leave them with the manuals. 

    Step #3: Provide a vendor list. Give the buyer contact information for home contractors or maintenance companies that you’ve used in the past. These vendors are familiar with your home, and the new owner will appreciate having a list of servicers they can trust will take good care of their new home.

    Step #4: Check for forgotten items. Do one more check throughout the home to make sure you’re not leaving anything behind. One exception: You may want to leave unused or leftover paint cans in the colors currently in use within the home — but confirm with the buyer first.

    Step #5: Turn off water shut-off valves. The last thing you want before closing is a flood. With the buyer’s permission, turn off your house’s main shutoff valve 24 hours before closing.

    Step #6: Lock up. Until settlement is complete, you’re legally responsible for the home — meaning you’d be liable if there’s a break-in before closing. So, the day before settlement make sure to close window coverings and lock the entry doors. If a house looks un-lived in, it’s a welcome sign to burglars. It’s a good idea to leave a porch light on, or to set an interior light to turn on and off with a timer.

    If the final walk-through reveals an issue with the house, don’t panic. The standard protocol is for the buyer’s agent to immediately alert the listing agent that there’s a problem. Then, both parties work together to solve it. Typically, either the closing gets delayed or there's additional negotiation, such as monetary deduction of the sales price. In other words: There are options, and your agent can help you through this.

    Up Next: The “Closing Disclosure”

    Let’s assume the final walk-through is smooth sailing. (Woo-hoo!) What happens next?

    You’ll get info about your closing costs from the title company. 

    Meanwhile, the buyer’s mortgage lender must provide the buyer with a Closing Disclosure, or CD, three business days before settlement. This is a formal statement of the buyer’s final loan terms and closing costs. As the loan borrower, the buyer is entitled to a three-day review period to see if there are any significant discrepancies between their CD and Loan Estimate (LE) — a document buyers receive when they apply for a loan. The LE outlines the approximate fees the buyer would need to pay.

    In most cases, there are no major differences between the CD and LE. However, if certain closing costs differ by 10% or more between the estimate and the disclosure, the buyer’s loan has to go back to the mortgage lender so that cost differences can be reviewed. If that happens, closing is usually delayed until the issue is resolved.

    Expect to See These People at the Closing

    The closing typically takes place at the title company, attorney’s office, or the buyer’s or seller’s agent’s real estate office. (Unless you live in a state that allows for electronic closings -- eClosings -- with remote notaries. In that case, the involved parties can opt to sign documents digitally.)

    The list of legally mandated {{ start_tip 104 }}attendees{{ end_tip }} will depend on your state, but usually you’ll be joined by:

    • Your agent
    • The buyer
    • The buyer's agent
    • A title company representative
    • The loan officer
    • Any real estate attorneys involved with the transaction

    Remember to Budget for Closing Costs

    Closing costs can vary widely by location, but you’ll generally pay closing costs of 5% to 10% of the home’s sales price. So, on a $300,000 home, you can expect to pay anywhere from $15,000 to $30,000 in closing costs. In most cases, these costs are deducted from your proceeds at closing.

    Closing costs for sellers typically include:

    • The commission for the listing agent and buyer’s agent
    • Transfer taxes or recording fees
    • Loan payoff costs
    • Unpaid homeowner association dues
    • Homeowner association dues included up to the settlement date
    • Prorated property taxes
    • Escrow, title, or attorney fees

    Be Sure to Bring These Things to Closing

    At the closing you should have:

    • A government-issued photo ID
    • A copy of the ratified sales contract
    • House keys, garage remotes, mailbox keys, gate keys, and any pool keys
    • A cashier’s check, or proof of wire transfer, if your closing costs are not being deducted from the sales price. (Yes, it’s OK to use a cashier’s check — especially if you don't want to deal with the hassle of a wire transfer, which can take time to clear. With a cashier's check, you're guaranteed the money you need for settlement will be there at closing.)

    Don’t Forget to Dot These I’s and Cross These T’s

    Before you rush off to pick out paint samples for your new place, remember to do these two steps that are often overlooked by sellers:

    Transfer utilities. Don’t want to pay for the new owner’s utility bills? Coordinate with the buyer so that utilities — including not only gas and electric but also water and cable — are transferred to the buyer on {{ start_tip 103 }}closing day.{{ end_tip }}

    Change your address. You obviously want your mail to be sent to your new home. Setting up a forwarding address will also ensure that you can be reached if there are any post-closing matters. You can file a change of address with the U.S. Postal Service here.

    Finally: Celebrate!

    At last, your home is officially sold. Congratulations! Give yourself a pat on the back — and then start settling into your new phase of life.

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    What Every Seller Needs to Know About Closing - https://www.houselogic.com/sell/how-to-sell-step-by-step/home-closing-process/

    By HouseLogic  |  Published: April 12, 2018

    Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

     

    Winter Can Be a Hot Time for Sellers

    The days are shorter, it's cold and dark. The weather often gives people a reason to stay indoors. It's no wonder the winter months can also keep potential home buyers and sellers out of the market until the snow starts to melt and the spring season begins to bloom.

    Yet, there are still advantages to selling a home during the winter, mainly due to inventory shortages and motivated buyers often willing to pay a higher price. Selling in the winter can pay off, but keep in mind, preparation is still needed for your home to stand out to potential buyers.

    According to the National Association of Realtors®, nearly 80 percent of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home. For homeowners interested in selling their home this winter, here are some typical listing and staging tips to keep in mind.

    Get Cozy. It is important for potential buyers to imagine themselves living in your home, so it is a good idea to decorate for the season when opening your doors for interested buyers. When hosting an open house, consider lighting the fireplace, festively decorating or hanging lights to showcase a cozy vibe to which buyers can relate. Also, ensure your home is kept at a warm temperature so potential buyers are comfortable when they walk inside from the cold.   

    Clear the Way. Make sure to shovel your driveway and sidewalks and clear snow off any decks or patios. Potential buyers should be able to easily access your home without the danger of slipping on ice or tracking in snow. Also, remove any icicles or built-up snow from your roof, so that your home looks clean and ensure your “for sale” sign is easily visible in your front yard.

    Work with a Realtor. Finally, be sure to work with one of our Realtors, who can share more tips for listing your home this season.

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