Negotiating Strategies when Buying/Selling Real Estate
Negotiating strategy #1 – Negotiating use of a Seller’s
equity when articulating your demands in your Offer to buy the home the Seller
has on the market.
I will be providing a How To lesson on: Structuring and Negotiating the Offer you
submit to the home-Seller by giving my written scenario fictional story example
to give the situation factors involved in this opportunity to purchase a
seasoned-owner home currently on the market.
Follow the facts and dollar amount figures. Reason and logic through the expectations the
buyer feels are worthy of requesting.
The
home I am selling is roughly figured to sell at the price of $189,900. but
factored in is the unknown (negotiation room) and commissions for agents that
may surface and feel their contribution was winning nudge tying the deal
together and thus you want to count them into the deal paying 3 percent per
side (both buying agent and selling agent reaping 3% of the Sales Price, each).
Seller sets the advertised price at $222,000. Before long some smooth negotiators come by
and see the home. Showing no emotion and
no passion about the home, they view and list the updating they feel is
necessary to bring the home up to par.
The Seller gets a call from the buyers and the buyers offer
(with "NO real estate agent" involved) the following:
$198,000. Price to
be paid for the home.
10,000. Buyers own money down.
188,000. Buyers to Finance the Net diff.
6,000. Seller equity to be awarded the home
Buyer for their own rehab of the home and updating.
4,000. Seller contributed proceeds toward
buying-down the Interest Rate for the Buyer financing.
500. Seller negotiates the Appraiser to be
paid from the Settlement of Escrow by Title Officer.
200. Home Inspection paid by the Buyers
outside of Closing.
This ensures the Buyers will have the lowest possible
house-payment since extra cash was thrown toward Discounting the Rate of
Interest and beefing the Origination Points to butter up the Mortgage Broker so
he/she has not the temptation to raise rates to fund backside points to which
their Commission comes from. Plenty of
front side points for the Broker ensures the absolute lowest Interest Rate of
the Loan Program can be utilized to calculate the house-payment. {MoneyTip!!!}
The Buyers are $300.00 ahead on the entire transaction with
$6000.00 cash coming to them at the Close of Escrow to refurbish the home as
they see fit.
The Sellers net $187,500.00 from Sale of their Home. Figured accordingly:
$222,000. Initial
Price of Home Advertised.
24,000. 6%
commissions NOT PAID to real estate agents.
None were involved, remember. Inflated
price was reduced by this unknown factor. Good Faith gesture on the part of the Sellers
produced a price
was that was fairly reduced.
10,000. Paid toward Closing Costs of the Buyer for
home remodeling expenses/ updating home.
500. Appraisal Fee netted out of the Settlement
at Closing and paid out to the Appraiser by Title Company after Closing.
NEGOTIATION FORMAT and planning of your OFFER is critical to
the buyers ability to close on the home he desires to buy. Resources should be preserved in any manner
possible for the home buyer. This
promotes a greater opportunity for long-term success in mortgage debt
management and ability to stay in this home for as long as desired.
(Copy Editing done to this article was by Author Cheryl
Miller-Eld on July 10, 2012)
(Originally Written July 5, 2011)
by Cheryl Ann Eld (MillerEld) Copy Editor for:
WSWwebdevelopment and its web development projects
