FOUR KEYS TO GETTING THE BEST DEAL
Negotiation is a complex matter and all transactions are unique. Both sides – buyer and seller – want to feel the outcome favors them. Experience shows there are four basic keys which help determine who wins at the negotiating table.
WHAT DOES THE MARKET SAY?
At various times we’re in a “buyer’s” market, a “seller’s” market, or a market where housing supply and demand are roughly equal. If possible, you want to be in the market at a time when it favors your position as a buyer or seller.
Because all properties are unique, it is possible to have more leverage than the marketplace would seem to allow. For instance, if you find a property where the seller has overpriced his home and the Days On Market are stacking up, you may be able to get a better deal. Or, if you’re a buyer who can close quickly, that might be an important negotiating chip when dealing with an owner who just got a new job 500 miles away.
WHAT ARE THE DETAILS?
A lot of attention in real estate is paid to transaction prices. This surely makes sense, but the key to a good deal may be more complex.
Consider two identical properties that each sell on the same day in the same town for $390,000. Are the deals the same? Maybe not. For instance, one owner may have agreed to paint the exterior, replace the roof, purchase a new dishwasher, and pay the first $3,000 of the buyer’s closing costs. The second owner made no concessions.
In this example, the first house actually sold at a discount – the $390,000 purchase price less the value of the roof repairs, closing credit, and other items. If you’re a buyer, this is the deal you want. If you’re a seller, you would prefer to give up nothing.
WHAT ABOUT FINANCING?
A real estate transaction involves a trade: a house for money. We know the house is there, but what about financing? There are a couple of factors that impact the money issue: Has the buyer been prequalified or preapproved by a lender? (See article below) If the seller accepts an offer from a buyer with unverified financial strength, it’s possible that the transaction could fail because the buyer can’t get a loan.
It used to be that downpayments were a major financing hurdle – but not anymore. For those with good credit, loans with 5 percent down or less are now widely available. But the buyer with a larger downpayment is less of a risk due to the diminished chance that a low bank appraisal will matter to the lender.
WHO HAS EXPERTISE?
Imagine you’re caught in a fight. The other guy has black belts in 12 martial arts – and you don’t. Who’s going to win?
A buyer/seller can hire their friend who started two years ago, or the former practicing lawyer turned real estate agent with 20+ years of experience in every type of negotiation imaginable. Who has the advantage at the bargaining table? As a former practicing attorney, I’m anxious to put my additional negotiating knowledge to work for you.
To learn more about me, email me at Don@DonSellsHomes.com or call anytime at 339-927-2759.