For the moment we can mostly forget the days when five buyers were all clamoring for our house and we chose the ones with the cutest kid. Nowadays, if a buyer presents itself (and its offer!) we are quaking in our boots wondering if we even dare to counter-offer to get the deal without rocking the boat!
Of course, the realtor will do all this nerve-wracking stuff for us, and he will have more 'inside information' to go one, but we are still involved as the buck stops with us! Several key points are relevant in all negotiations. Very briefly these are: state of the market; extras involved (if any); buyer's financing; negotiating skills; who has the advantage?
Well, in the first case, we all know the state of the market. It is the type of market where it is better to be buying than selling! Therefore this could be one black mark to you (okay - gray mark).
As for the extras involved, this will be entirely up to you. But if there are extras involved, it will swing the balance back to a more fair level. Buying a house is not all about money, as most of us realize.
Our emotions are involved; the 'feel' of the house, the neighborhood and some practical aspects are all tantamount to our choice. However, after that, the bottom line is hard cash!
This is where you can pull the balance a little over to your side by offering some unlisted extras. For instance if it is 15 years since you bought your refrigerator and they would probably buy the house if you bought a new one - buy a new one! The cost is a very small percentage - very small - of the purchase price. There is an old proverb that covers this type of deal: setting a mouse to catch a tiger. You throw away a little thing to entice the big thing.
You may have to offer more, but if it will clinch the deal it may be worth it. For instance, if they want you to get the roof done before they move in, talk to your realtor about whether this will really guarantee a definite sale.
As far as the prospective buyer's financing goes, your real estate agent will have the entire scoop on that one, it is part of his job to try and assess the genuine purchasing power of any prospective buyer.
There is one other way that is gaining more popularity in this market, that of actually making a 'seller's contribution'. This means you will offer to pay for some of the expenses involved in buying the house.
Help the buyer to proceed: it could be anything, but you are probably best advised in helping with the closing costs, as at least you will be nearer to the finalities by then. This is a better way of helping than dropping the asking price, which would mean delays while the legal agreement that you had both signed was changed.
With regard to expertise, these days you can find buyer's agent's as well as seller's agents although most home-owners seem to stick to the traditional method of sale. However, when you choose your real estate agent, try to be objective about assessing his negotiating skills. Is he sincere and charismatic, or does something of his manner irritate you slightly? Choose carefully, he will be representing your bank balance!
Short Sale For Buyers
Buyer's remorse, in real estate, occurs when your buyer tells you he has changed his mind and no longer wants to purchase your home. Often, the buyer will simply stop returning your calls and refuse to speak to you. Even worse, he may act as if all is well, string you along for weeks, and finally just not show up for the closing.
Usually this issue occurs when the buyer realizes he can not afford your property. Or after signing a contract with you, he may also have continued shopping and found another property he prefers.
Frequent excuses for not closing usually include a job transfer that fell through, unexpected spousal separation, illness of a family member, didn't like the neighbors when he spoke to them, and a myriad of other things that have gone wrong since he signed your sales contract. Even if his excuse is true, you now face the dilemma of having to resell your home and incur the additional expenses of carrying the property for several months or longer. Even if you are able to rapidly resell your home again, you will have been delayed by at least thirty days and have the loss of carrying your home longer.
Here are some ways to protect yourself from your closing being cancelled:
1.)You should have your mortgage broker pre-qualify the prospective buyer to be certain they can actually afford to buy your home and if they have enough money for closing. The closing cost issue can be overcome by increasing the selling price and giving back the same amount as a seller concession at the closing.
2.)You should make certain that the buyer gets a Good Faith Estimate. Too often, the buyer's mortgage broker has the buyer sign a blank Good Faith Estimate. The buyer may get a huge surprise, often the day before or the day of closing, when he finds out how much he has to bring to the closing. You have an option, in this case, of reducing your sales price to accommodate the buyer or, even better, you can take back a small second mortgage at the closing to defer a portion of his closing costs.
3.)The best way to guard against these surprises is to be inquisitive about the buyer's funding status initially and insert a clause in your sales contract that allows you to get information from the buyer's mortgage broker regarding the Good Faith Estimate and the status of the loan. You have a lot at stake when you sell your home and this is not too much to ask.
4.)Make certain that your sales contract has a non-refundable escrow deposit clause that encompasses any reason including the buyer's inability to get financing. Most real estate contracts have a provision for the buyer to get a full refund of their deposit if they are unable to get financing. The second most important part of this sales contract clause should include that any extension of the closing will cost the buyer a given rate per day and for a maximum of fifteen days.
A frequent reason for a cancelled closing is a dramatic change in the buyer's FICO score. Usually this results from large purchases of furniture or an automobile just prior to closing. Inform the buyer of this possible issue by explaining to him that the lender will re-pull his credit report the day of closing and stop the closing if the buyer's debt ratio has changed too much. Ways to overcome this problem are credit re-scoring by the lender and quick fixes for your credit report, such as increasing the limits on your existing credit cards to adjust your debt ratios.
Your best protection from surprises is to put appropriate penalty clauses in your contract; have alternative lenders available from your mortgage broker; be open-minded about doing a seller concession at closing; and be willing to consider a small second mortgage to assist with last minute financing shortfalls.
In summary, your best prevention is to proactively keep in touch with all the parties involved in your closing. Of particular importance, and on the front line of issues that ?pop up? is your closing agent's file processor. Make friends with this person so you can call and find out about the progress of the lender, mortgage broker, the buyer and any issues they may be having with the title work. As always, keep yourself informed by keeping open communication with all parties involved in the sale of your home.
The author has over 30 years experience in real estate investing which has given him a unique perspective into the workings of the real estate market. You can get his free CD entitled ?How to Sell Your Home in as Little as 72 Hours?, at www.CDOffer.FSBOPowerSellingSystem.com/home.htm and he has even more tips to share included in his homeowner's selling system at www.FSBOPowerSellingSystem.com
Both Sanjog Gopal & Dave Dinkel are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Sanjog Gopal has sinced written about articles on various topics from Mortgage Insurance, Real Estate and Finances. This article was written on behalf of Sanjog Gopal. Sanjog has many years of experience as a professional REALTOR® in the market. Sanjog brings pa. Sanjog Gopal's top article generates over 14800 views. to your Favourites.
Dave Dinkel has sinced written about articles on various topics from Foreclosure Help, Internet Marketing and Advertising Guide. David Dinkel has over 30 years experience in real estate investing which has given him a unique perspective into the real estate market. He has created a powerful CD available for Free entitled ?How to Sell Your Home in as Little as 72 Hours? designed to. Dave Dinkel's top article generates over 33100 views. to your Favourites.
