Once interested buyers start putting in competing offers on a desired property, there is the potential for things to become rather stressful and overwhelming. To help keep everyone focused on what matters most, here are the important points to consider other than just the price of the house during negotiations.
Possibly the most obvious of all options is making large adjustments to the base offer or counteroffer outside of the base price.
Some sellers looking to offload an older or outdated property might include a gift card to a hardware store with the understanding that the property will need a serious overhaul. Another more conventional way to show a serious commitment to buying a property is to put down earnest money equaling between 1 and 3% of the established purchase price.
Finally, a common bargaining chip used by both buyers and sellers is offering to pay for closing costs. The reason this carries such immense weight in negotiation is that the closing costs will in all likelihood add up to thousands of dollars.
The actual closing costs will be determined by title insurance, attorney fees, local and state taxes, and more.
Sometimes an offer can appear incredibly enticing on the surface but then create problems by including too many, or too stringent, repair contingencies.
Taking the time and care to go through a thorough home inspection will reveal any conceivable problem areas in a home. The downside can arise as some buyers will feel these problem areas absolutely must be addressed by the seller to the buyer’s satisfaction before moving any further toward closing.
This scenario can easily lead to a breakdown in negotiations, and it’s critical that both the buyer and seller do their best to understand the thoughts and concerns of the other party when deciding which repairs are necessary, and which are not.
Another consideration that can make a big difference to both buyer and seller is the speed with which both parties can agree on closing.
The seller needs to have an appropriate amount of time to take care of any agreed contingencies and move out. Meanwhile, the buyer is going through the gauntlet of inspections, finalizing any financing, and planning for their move as well.
During negotiations, both parties are best served understanding these things all take time, and it’s best for everyone involved to work in tandem to reach that mutual goal of closing on the property in a reasonable timeframe. If you get a sense that the other party is in a rush to reach closing, this could be a red flag worthy of closer review.
As a home seller, you bank on the location of your property to draw in the right buyer and get you the offer you’ve been waiting for.
As a home buyer, you’re likely to find a property desirable if it’s near your usual shopping and entertainment destinations, well-rated schools, or close proximity to city services and major commuting routes. If you’re living in a major city, you may also factor in accessibility to mass transit stations.
These points can all come into play during negotiation in order to increase an offer because of the convenience, or even decrease an offer because you feel it’s acceptable but not exactly what you’re looking for. Be ready to make your case in a substantive and concise manner.
Finally, buyers should take into account the prospective resale value if they are to purchase the property. The location of the property and the neighborhood in which it exists are a large part of that resale value.
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