Saturday, 15 April 2017

How to Negotiate Real Estate

Erik laine: In any real estate negotiation, buyers ask and sellers push back -- because if you're the buyer and you don’t ask, you don’t get.While sellers want the highest price and buyers want the best deal, the two have to meet somewhere in the middle for the deal to close. Negotiating for a home is important since this is the largest asset most people own and there’s potentially a lot of cash at stake.

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One party always has the upper hand, however. In a buyer’s market, those looking for a property can walk away if they don’t like the terms, since they have many homes to choose from. In a seller’s market, with bidding wars and multiple offers, the homeowner can be as picky about the myriad terms of the sale as his or her agent allows.

“In any market, a truly motivated seller is less inclined to engage in lengthy negotiations -- they just want to get the deal done,” says Mazen Fawaz, CEO of OpenHouse, in Santa Monica, Calif.

For those new to the real estate dance: The negotiations start once the seller receives a written offer. Since everything is negotiable, Real estate agents for the buyer and seller go back and forth in writing, whether that communication is via email or signed forms.

Closing Costs

 

Buyers have to pay prepaid closing costs for their mortgage, which is money that the mortgage lender holds in escrow, for items like taxes and insurance. “A buyer may ask a seller to pay a flat dollar amount toward their closing costs, or up to a percentage for what’s an allowable contribution for a lender.

Closing date

Sellers can negotiate for speed when they need to get their capital out of the home fast; and closing dates will affect buyers' monthly cash flow once they own the home. “Keep in mind, when a buyer closes on the house, they skip the next month’s mortgage payment,

Price

 

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Buyers don’t want to overpay or price themselves out of a resale in the future, while sellers want to make sure the deal makes sense for their financial plan.

Home warranty

A buyer can ask for a home warranty, or a seller can offer one. This protection plan covers the home’s appliances and systems, like the air-conditioning and hot water heater, in the event these things break or need repair.

Furniture

Personal property, like patio furniture, chandeliers, window treatments and cabinets, is also up for grabs. “If the buyer wants all the furniture, it becomes very much of a tradeoff and compromise between what everybody wants.

Originally Posted : https://www.entrepreneur.com/article/253732