Give and Take Negotiation
by Drew Peterson
Headlines bleed:“Housing Market in Shambles”, “Mortgages Defaulted”, “Steal A Short Sale Today!” Since the onslaught of the national media, there are many Buyers who have successfully negotiated the “bargain of the year.” Other Buyers are pondering the press and the internet to search house sales data waiting for the signal to purchase.
However, Buyers who wait are realizing they may have missed the wave as short sales and bargain properties are swept away at the closing table. Many Sellers grasp the realization that the real estate market did not shift from Boom to Bust. Rather, the market has shifted from Boom to REALITY. And, based on seller’s motivation, house inventory has been moving since now sellers are treating every offer as if it were the only one the Seller will receive – its all about the give and take between buyer and Seller.
With the media blood bath, buyers who do decide to dive in, pounce on a list price with a vengeance. Many home sellers refer to these buyers as oceanic “bottom feeders” where the attempt is to negotiate tooth and nail to strip the home seller of every penny and ounce of pride. Of course, until title is passed, it is still the Sellers’ property.
Buyers should not be over confident when it comes to negotiating. If a house is priced right from the get-go, there may be multiple bids where Sellers propose highest and best terms and price to buyer contenders. Every property for sale is not a short sale or fire sale opportunity. So, what makes a good negotiation for a Buyer and Seller?
Buyers should submit a pre-approval or commitment letter from a mortgage representative. The letter should be specific to the offering price and loan terms. If a cash offer, provide a verification of funds.
Your real estate agent can provide and review comparables of houses that have SOLD. In many markets, bank appraisers are using only recent sales. Active list prices are not factual and are not used by a bank appraiser.
Know what the list to sales ratio has been over the past six months in your local market. Is the offer in range of the ratio?
Review the Multiple Listing Data Sheet. Understand what is included, appliances, sprinkler system, lighting fixtures, etc…Even window treatments and fireplace tools are not considered fixtures. Rather, anything not bolted attached is referred to as personal property is known as chattel. Please do not forfeit a sale with the loss of a over a washer or dryer combination either.
All offers should be in writing to be taken seriously and to validate open questions.
Include a specific time frame for inspections and contract signing. Can inspections be completed in 5, 7, 10 business days?
Buyers and Seller should provide the name of a real estate attorney with the offer.
Determine what the Seller paid for the property, current mortgage, commission fees and estimated closing costs to determine potential net to Seller.
Sign all property disclosures and submit with offer
The Seller has three options, accept, reject or counter offer.
A counteroffer automatically nulls the initial offer and Buyers now have the decision to accept, reject or counter offer once again.
Be very clear on what may be termed an “AS IS” listing. Most foreclosures and short sales are “AS IS” I have witnessed many personal effects including dishes in the dishwasher, televisions sets and plain rubbish left for the new homeowner to contend with on closing day.
Connecticut is not a survey state where a survey is required from the Seller. Therefore, when not available, it is the Buyer’s responsibility to research data showing lot dimensions, wetlands, easements, setbacks, well, septic, locations. Does the property share any contiguous lot lines for undeveloped parcels? Is there a shared driveway? Neighborhood Association? Annual Fees? A real estate attorney can advise in these areas and a visit to the local town hall will provide most of the information.
Realize that negotiations are a business transaction, market conditions vary by locality, and location, location, Motivation will be key component to establishing a meeting of the minds between a Buyer and Seller.
by Drew Peterson
Headlines bleed:“Housing Market in Shambles”, “Mortgages Defaulted”, “Steal A Short Sale Today!” Since the onslaught of the national media, there are many Buyers who have successfully negotiated the “bargain of the year.” Other Buyers are pondering the press and the internet to search house sales data waiting for the signal to purchase.
However, Buyers who wait are realizing they may have missed the wave as short sales and bargain properties are swept away at the closing table. Many Sellers grasp the realization that the real estate market did not shift from Boom to Bust. Rather, the market has shifted from Boom to REALITY. And, based on seller’s motivation, house inventory has been moving since now sellers are treating every offer as if it were the only one the Seller will receive – its all about the give and take between buyer and Seller.
With the media blood bath, buyers who do decide to dive in, pounce on a list price with a vengeance. Many home sellers refer to these buyers as oceanic “bottom feeders” where the attempt is to negotiate tooth and nail to strip the home seller of every penny and ounce of pride. Of course, until title is passed, it is still the Sellers’ property.
Buyers should not be over confident when it comes to negotiating. If a house is priced right from the get-go, there may be multiple bids where Sellers propose highest and best terms and price to buyer contenders. Every property for sale is not a short sale or fire sale opportunity. So, what makes a good negotiation for a Buyer and Seller?
Buyers should submit a pre-approval or commitment letter from a mortgage representative. The letter should be specific to the offering price and loan terms. If a cash offer, provide a verification of funds.
Your real estate agent can provide and review comparables of houses that have SOLD. In many markets, bank appraisers are using only recent sales. Active list prices are not factual and are not used by a bank appraiser.
Know what the list to sales ratio has been over the past six months in your local market. Is the offer in range of the ratio?
Review the Multiple Listing Data Sheet. Understand what is included, appliances, sprinkler system, lighting fixtures, etc…Even window treatments and fireplace tools are not considered fixtures. Rather, anything not bolted attached is referred to as personal property is known as chattel. Please do not forfeit a sale with the loss of a over a washer or dryer combination either.
All offers should be in writing to be taken seriously and to validate open questions.
Include a specific time frame for inspections and contract signing. Can inspections be completed in 5, 7, 10 business days?
Buyers and Seller should provide the name of a real estate attorney with the offer.
Determine what the Seller paid for the property, current mortgage, commission fees and estimated closing costs to determine potential net to Seller.
Sign all property disclosures and submit with offer
The Seller has three options, accept, reject or counter offer.
A counteroffer automatically nulls the initial offer and Buyers now have the decision to accept, reject or counter offer once again.
Be very clear on what may be termed an “AS IS” listing. Most foreclosures and short sales are “AS IS” I have witnessed many personal effects including dishes in the dishwasher, televisions sets and plain rubbish left for the new homeowner to contend with on closing day.
Connecticut is not a survey state where a survey is required from the Seller. Therefore, when not available, it is the Buyer’s responsibility to research data showing lot dimensions, wetlands, easements, setbacks, well, septic, locations. Does the property share any contiguous lot lines for undeveloped parcels? Is there a shared driveway? Neighborhood Association? Annual Fees? A real estate attorney can advise in these areas and a visit to the local town hall will provide most of the information.
Realize that negotiations are a business transaction, market conditions vary by locality, and location, location, Motivation will be key component to establishing a meeting of the minds between a Buyer and Seller.
