18 Jan Buying a Home – Everything is Negotiable
Buying a Home – Everything is Negotiable
When buying a home, buyers should not be intimidated in the purchase negotiations process. They often see a standard contract and think that many items are set in stone, but almost everything is negotiable. Your lender will require home insurance, and you will be required to escrow for taxes and insurance if you are getting a mortgage. There are some other things that are a must for all home transactions.
However, when it comes to the transaction between buyer and seller, do not assume as a buyer that you do not have leverage in several areas of the transaction.
The Purchase Contract Negotiations
In most cases purchase deal offers and acceptances go relatively easily, with maybe one counteroffer and then acceptance. Others can involve working through multiple counteroffers with changing contingencies. The back-and-forth is intimidating to some buyers, but it should not be. You, as the buyer, do not know what the seller(s) discussed with their real estate agent about pricing of the home and their bottom line for price.
Seller Listing Limitations or Hold-backs
Some buyers can be intimidated by listings that have limitations on what goes with the home and other items that the sellers want to take with them. Generally, if it is attached it is supposed to be considered part of the real estate included in the sale. However, sellers often have things they value that they do not want to leave, such as a family heirloom light fixture, or some other seemingly “built-in” item or appliance.
Rather than considering a seller’s statement that they will be taking something with them as a negative, consider it a negotiation opportunity. When you are making that first offer, you can state as a contingency of your price offer that they leave that item, even if you do not really care. This gives you an opportunity to give it back at some point in the negotiation to get something you want.
Contract Item Payment Contingencies
Real estate contracts for purchase and the local standards of practice result in the local customary filling-in of certain closing line items, payment terms, and responsibilities. For example, usually the seller is responsible for paying for the title insurance policy, and this is not something you as a buyer are likely to want to argue about.
However, other closing fees and line items may be filled in for you, the buyer, to pay. An example is the home inspection cost. It is likely that you will want to pay for that to give you control over the selection of the inspector to be sure you get a thorough report of all problems. There could be other line items that you may want to use as bargaining tools to get the deal you want. You may not have an objection to any of the standard practice line-item terms, and your buyer agent will tell you about them, as they are being filled in on your first offer paperwork.
Home Inspection Report and Repairs
The home inspection report usually points out several or even many areas of concern about the home’s condition, usually not major, but needing repair. At this point, the contract provides a time frame for the buyer to submit their desired seller actions. They could include actually making repairs before closing, or if the lender allows, a cash credit from buyer to seller to pay for repairs after closing.
Suppose you see that the seller wants to take certain items with them, and you really do not care that much. It could be a free-standing hot tub or any other item that a buyer could assume should be sold with the home. These would normally be stated in the listing, but they could also show up in a counteroffer. Whether you want them or not, you could deliver a counteroffer stating you want them. This could be a counteroffer at a lower purchase price as well. You may be able to jiggle the price to where you want it by giving up your requirement for the item you did not want anyway.
Just remember that the realtors, title company, seller(s), insurance company, and possibly others are all waiting to get paid, and you bring the money to the table. You have negotiation strength. Also, you’re not an expert and it is usually better if you hire an expert. A Realtor does this on a daily basis and, if the Realtor is good at negotiation, they will be able to maximize the out come in your favor.
If you are considering buying a house, you may want to read “10 Steps To Buying a House For The First Time Home Buyer”
For more information on buying a home in Chautauqua, feel free to call Michael McVinney (716-640-0104) to setup a free consultation or go to www.michaelmcvinney.com. Michael also serves all surrounding counties in Western New York.
Realtor – Broker