Let's not leave any extra money on the table when negotiating your contract.
Helpful Tip #1: Find out as much about your opponent (the buyer or seller) as you can before entering into contract negotiations. The more you know about their hot buttons, their needs, their desires, the easier it is for you to negotiate a contract in your favor.
Some of the items you should know include:
a. How long the home has been on the market?
b. Have there been any offers written on the property? Why did the offer(s)
not succeed?
c. Have there been any price reductions? When was the last one?
d. What is the ideal date for them to move?
e. What, if any, are their company contributions toward the move?
f. What is their reason for moving?
g. Are there any marital or child based issues they are dealing with?
Helpful Tip #2: Have your broker write a cover letter that specifically details the benefits you are bringing to the table and provides convincing reasons why the seller/buyer should accept your offer (or counter offer if you are the seller).
a. The letter should include such things as you have agreed to like the ideal
closing date your seller is looking for.
b. Mention the extremely high earnest money you are offering. (Since your earnest
money becomes part of your down payment at closing, offer 1.5 to 2 times the
amount that has been requested. It really strengthens your offer without costing
you anything.)
c. Include the fact that you are pre-qualified and pre-approved for the loan
(Less risk for the seller).
d. What about the favorable rent back terms after closing if the seller would
like to stay in the property a little longer? This may give you another selling
point - an ace to strengthen your hand.
Helpful Tip #3: Write a letter to the seller that "sells" you to them.
Explain to the seller why you like their home and why it will be so perfect for your family. This personal touch can net you a more favorable price and it will put your offer in first position if there are similar competing offers on the property.
Helpful Tip #4: Be sure your agent has the required skills to properly negotiate your contract.
Realize that there are no requirements for brokers to learn any negotiation skills. Classes are provided to Realtors® to learn these skills.
Frequently, untrained brokers are so personally attached to their client that they become overly involved in the negotiation process. They can end up making statements and demands for their client without first conferring with them. This is a costly mistake.
An agent who becomes too emotionally involved ends up offending the other party or other broker with their intensity and desire to "do a good job " for their client. The other party (or their broker) can then become aggressive, combative or defensive. When this happens it may cost you many thousands of dollars. Or worse, an unskilled broker may even prevent you from successfully concluding your transaction at all.
A successful negotiation is a learned skill. The process has many specific sound rules, that if followed are quite productive.
Helpful Tip #5: Consider buying the home in its "As Is" condition.
This greatly reduces the risks of further price concessions from the seller. In many cases, it will allow you to purchase the home well below market value.
You may want to have an inspector join you on a second visit prior to writing
an offer just to check on the major expense areas of the home. Generally, the
newer the home, the less risk there is for you. Or, if you are handy around
the house and can make repairs on your own, or if you have a list of trust worthy
contractors, buying a home this way may be a great option to consider.
