Jun 1, 2023 | Real Estate
Crafting a counter-offer that doesn’t scare away a potential home buyer can be tricky. Here are five tips to help you navigate the negotiation process while keeping the buyer interested:
Keep emotions in check: Avoid letting your emotions drive the conversation and try to remain objective throughout the negotiation process. Keep in mind that the buyer is also looking for a fair deal, and it’s important to approach negotiations with a collaborative attitude.
Understand the buyer’s needs: Understanding the buyer’s needs and motivations can help you craft a counter-offer that meets their expectations. For example, if the buyer is seeking a quick closing, you may want to consider offering to close sooner than anticipated in exchange for a higher price.
Be clear and concise: Your counter-offer should be clear and concise, outlining specific terms and conditions. Avoid using ambiguous language and ensure that the offer is easy to understand.
Be reasonable: While you want to get the most out of your home sale, it’s important to be reasonable with your counter-offer. Consider the current market conditions and the buyer’s position and aim for a fair deal that benefits both parties.
Keep communication open: Effective communication is key to successful negotiations. Keep communication channels open throughout the process and be willing to listen to the buyer’s concerns and feedback. This will help you build trust and rapport with the buyer, making it more likely that they will accept your counter-offer.
To avoid frustrating an interested homebuyer, it’s important to be responsive and timely in your communication regarding their offer. Don’t let their offer sit for too long without acknowledging it and make it clear that you’re actively considering it and will provide a response promptly.
Successfully negotiating a home sale can be challenging, but being open and flexible in your approach can increase your chances of receiving the desired offer.
Mar 8, 2022 | Real Estate
Buying a house is an exciting time, but homeowners also need to make the best financial decision to meet their needs. One of the biggest decisions potential homeowners will face is how much money to put down.
A down payment is the amount of money that homeowners pay upfront when they purchase a home. Many homeowners believe they need to put down 20 percent; however, this is not always the case. What do homeowners need to know about putting a down payment on a house?
20 Percent Is Not Always Required
The reason why homeowners often believe they need to put down 20 percent is that lenders will often require a 20 percent down payment to avoid paying PMI. PMI stands for private mortgage insurance. If a homeowner puts down less than 20 percent, the lender takes on significant risk if the homeowner defaults. Therefore, the lender may require the homeowner to purchase PMI to protect the lender against the risk of default.
Homeowners might be able to secure a loan with 10 percent down if they are willing to pay PMI. First-time home buyers might be able to secure a home loan with as little as 3.5 percent down if they go with an FHA loan.
The Relationship Between Down Payments And Interest Rates
Homeowners might want to put down more money to earn a lower interest rate. Securing a lower interest rate could save homeowners tens of thousands of dollars over the life of the loan. If homeowners put down more money, the lender doesn’t take on as big of a risk. Therefore, the lender might be willing to charge a lower interest rate.
Work With A Professional
Ultimately, the size of the down payment is one of the biggest decisions potential homeowners have to make. It can take a long time to save up 20 percent for a home, but this is not always required. Homeowners need to know whether they need to pay PMI if they do not put 20 percent down, and they need to understand how the size of the down payment will impact the interest rate on a loan. It is a prudent idea to consult with a professional when deciding how much money to put down for a house.
Apr 27, 2021 | Real Estate
Home buying is often made possible or unreachable due to the local and national economy. Fortunately, what goes up, must come down. So, for buyers who can wait, economic changes in supply and demand can create opportunities. These shifts in real estate are known as buyer’s markets and seller’s markets.
The seller’s market specifically tends to be the harder one for homebuyers. In short, sellers see a lot of demand, so they can command higher prices for a sale. Things are competitive, sell fast, and inventory is low.
For buyers, it’s a headache, but there are ways of handling the challenge.
Understand Your Local Market Better
Many people might throw out the statement locally, “Oh good luck, it’s a seller’s market,” but that’s not necessarily the case until you can confirm it objectively. It may be that certain neighborhoods have high demand, but overall regional inventory is available.
Understanding your local market as a whole and by neighborhood gives a buyer a far better idea of what’s really going on and how to compare homes in different locations.
When Making an Offer, Go With Your Best Offer First
The worst that can happen is someone responds “no.” You didn’t really lose anything with a rejected offer. However, if they accept your offer as-is, then you may have scored a better deal than trying to hedge and bargain down after the fact. Negotiation can be more difficult in a seller’s market, and sellers can be quite motivated to drop a negotiation the instant a second buyer becomes available.
Be Prepared to Move Quick and Bid Fast
Sellers’ markets go fast. Bids are taken in a day and a sale happens the next day or by that evening. If going out to buy, you need to be ready to make an offer on-site. That means also having your pre-approval for financing squared away and having enough liquid assets to cover the down payment along with enough cash to cover closing fees as well. If you’re not wired up already, you will lose sales waiting for your financing prep to get taken care of.
Have Cash, Will Talk
Buyers who are able to show they have the cash to purchase make the process go much more smoothly. Sellers are far more interested in parties who can show they are a firm sale versus those with financing approval still pending.
Known as earnest money, a deposit placed on a home with larger than the minimum amount will get attention and commitment faster than someone with a nice bid but waiting for financing approval, thereby delaying the seller.
Anticipate Non-Cash Sweeteners
Sellers often have interests or desires to meet when letting go of a home. A buyer who can fathom what these are can improve a buying position considerably.
In some cases, it might be as simple as agreeing to additional time for a seller to move out.
In other cases, the seller might have an attachment to the home that they want to keep protected versus seeing it destroyed by a new seller.
Finding these things out can help a buyer make commitments in a sale that make it better for the seller and for the buyer versus other bids.
Sellers’ markets are hard, but there are ways around the challenge and getting into a home you want. By being flexible, creative, and ready you stand a better chance than bidders with half a heart in but one foot still hanging out.
