Are you buying a home in Council Bluffs? Don’t worry if you find home buying negotiations stressful. Rob Washburn is an experienced negotiator who helps keep bargaining rational and on track by thoroughly understanding your priorities and being readily available to consult during negotiations.
It’s important that you and your agent agree on a negotiation strategy beforehand and demonstrate the strength of your offer to the seller.
To begin, obtain preapproval for a mortgage loan so you know the exact amount you can spend. Preapproval involves your lender reviewing your credit, income, assets, debt-to-income ratios, and preapproving you for specific loan terms, interest rate, and amount.
If you get preapproved for a mortgage before making an offer, it conveys to sellers that you are ready and able to purchase their home. Before submitting an offer, have your agent inquire about the seller’s preferences for terms like the closing date. The more your offer aligns with the seller’s ideal terms, the more likely they will be to accept it.
To prepare for purchasing the house, find out when it will be vacated and review the seller’s disclosure about the property’s condition. Additionally, inquire if the seller plans any repairs or improvements prior to the sale, and if they face any time pressures like a relocation deadline that could serve as negotiation leverage.
Your agent should also determine if there are other offers on the table. You will have greater negotiating leverage if there are no competing offers. The seller may be less flexible on price reductions or repairs if other buyers have made offers.
Your agent will also provide the most recent comparable market analysis (CMA) of homes recently sold or listed near the property so you can shape your offer price accordingly. Be sure to compare similar features like renovations, square footage, amenities, location, school districts, and more when evaluating the CMA.
Once these steps are made, you are ready to write an offer.
Making the offer
Put yourself in the seller’s shoes. Doing so will help you predict what price, terms, and other conditions the seller may be willing to accept. When you consider the seller’s perspective, you can craft an offer that they are more likely to accept or seriously consider.
Your offer should clearly state the terms, closing dates, repair requests, and any other conditions the seller must meet. Include a preapproval letter from your lender confirming you are qualified to purchase the home. Also attach a cover letter highlighting your strengths as a buyer, such as strong credit, flexible closing date, and an attractive offer.
Your offer should clearly state the terms, closing dates, requested repairs, and any other conditions the seller must meet. Include a preapproval letter from your lender confirming you are qualified to purchase the home. Also attach a cover letter highlighting your strengths as a buyer, such as good credit, flexible closing date, and an appealing offer price.
When selling a home, the seller cannot dispute comparable home sales that demonstrate the property is overpriced or outdated. The most effective comparables are nearby homes (within two blocks) with similar age, size, and features that have sold within the last two months for less than the seller’s asking price.
To avoid misunderstandings, all conditions, repairs, and agreements should be put in writing. While some sellers may think a verbal promise suffices, it is crucial to clearly outline expectations and timelines in the contract. For example, if the seller agrees to repaint, add an addendum specifying the primer, color, paint type, number of coats, and completion date for inspection. Written documentation protects both parties by eliminating confusion about responsibilities.
Negotiating after inspections
The offer is negotiated and accepted, and the earnest money is deposited with the escrow agent. The next step is inspections, which can lead to contract negotiations breaking down.
No home is perfect, not even brand-new construction. During the inspection process, the inspector is typically required to inform you about the condition of appliances, heating and cooling systems, roofs, electrical and plumbing systems, etc., as well as whether your future home meets current city code requirements.
Sellers are usually not required to bring a house fully up to current local building codes. Instead, negotiate repairs only when a system is unsafe or when major repairs are needed to make the system function properly.
Provided the seller understands your position and rationale, and communication stays open, they should be as motivated as you to make the contract successful.
What type of real estate assistance are you looking for in 2024? Planning is crucial for both buyers and sellers. If you plan to buy, sell, or invest this year, let’s schedule a time to talk soon.
