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Some people are born
negotiators.
They'd negotiate the time of day if they had the
opportunity. Many people, however, feel
uncomfortable negotiating. If you fall in the
second camp, think of a home purchase
negotiation as a dialogue between you and the
seller. It's a forum for exchanging ideas with
one another to see if you can come to mutually
agreeable terms. If you can: Great. You've
bought a home. If you can't: that's OK, too.
You'll find yourself another home and the seller
will find another buyer. |
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There are many ways
to negotiate a home sale.
It's hard to generalize because each transaction
is unique. But, in most cases, a successful
negotiation involves give and take from both
parties. Keep in mind that you want the sellers
to feel good about selling their home to you.
You may need their cooperation during the
transaction.
For example, you may want to renegotiate the
purchase contract if your inspections reveal
unanticipated defects. You'll stand a better
chance of successfully working through these
negotiations if you've built good rapport with
the sellers. A cooperative, rather than
adversarial, stance usually produces good
results.
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FIRST-TIME TIP:
In the spirit of give and take, you may want to
plan your negotiation strategy so that you give
up something you want in exchange for the seller
giving you something you want.
For instance, let's say you know that the
sellers prefer a short close, and you think his
price is a little high. You might start the
negotiation offering a 60- or 90-day close and a
price that's a bit below the top price you'll
pay. When the seller counters back with a 30-day
close, you can accept this if the seller is
willing to sell at your price.
With this strategy, it's effective to save a
bargaining chip, or two, until a critical point
in the negotiation. That bargaining chip is
often your best price. You may be willing to pay
the seller's price if he agrees to take care of
some deferred maintenance. In this case, you
would hold back on agreeing to pay his price
until the seller agreed to make the necessary
repairs.
Another strategy that can break an impasse is
the "either/or" approach. With this strategy,
you give the sellers two options. They can take
their pick.
Suppose you're locked into a lease that runs 4
more months, and costs you $2000 a month. You
can't afford to pay the seller's asking price
and make double monthly payments for mortgage
and rent.
The seller wants to close in 30 days; you prefer
90 or 120. If the home is fairly listed for
$300,000, you might offer to pay $300,000 with a
120-day close, or $294,000 with a 30-day close.
The seller can choose. By the way, it can
further the negotiations if the other party
understands your circumstances.
It helps to plan out your negotiation strategy
in advance. Find out as much about the seller's
situation as you can. Determine the highest
price you're willing to pay. Make a pact with
yourself to walk away from the property if you
have to significantly overpay to get it.
Sometimes it's best to stand firm during
negotiations. Perhaps you've negotiated to your
best and final price. You may want to lay your
cards on the table and let the other party know
this. There's no rule that says you must counter
with a new price.
THE CLOSING:
And remember, all elements of the purchase
agreement are negotiable, not just the price.
By: Dian
Hymer: Dian Hymer is author of "Starting Out,
The Complete Home Buyer's Guide," Chronicle
Books. Copyright Dian Hymer
Distributed by Inman News Features
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