How to Negotiate: 7 Clever Home Buying Negotiation Tactics

Getting the house you want at the price you want can be tricky – even in a buyer’s market. Sometimes a home seller just isn’t willing to budge on price. Don’t despair! There are other ways to sweeten the deal and drive it to close in a buyer’s market. Here are seven tips on how to negotiate with a home seller.

Get the Dirt on the Home Seller

Learn as much as you can about the motivations and situation of the home sellers. For instance, if they’re living in the house and they need flexibility around the closing date, you could offer to be flexible on closing if they move on terms. In the case of estate properties, take some time to learn about the heirs – where they live, what kinds of houses they live in and whether or not they are in legal or financial trouble. It sounds creepy, but most of this information is available for free online once you have the names of the home sellers. You can also research obits and marriage documents that are in the public domain. The more you know, the more leverage you have when it comes time to negotiate.

Know What the Property is Worth

Work independently or with your agent to research comparable sales in the immediate area of the home, then make an offer at least 10 percent below what the market says it’s worth. Dig into the details to figure out how the home you want to buy stacks up against comps, and look for ways to communicate the legitimacy of your offer or requests by backing it up with data. For instance, if all comparable sales have a pool, waterfront property or updated kitchens and the house that you want doesn’t, point that out. Use this data to justify your offer or other requests to create value if they won’t budge on price.

Don’t be Afraid to Ask

If there are things that you want or need to feel comfortable with the deal, ask for them. The home seller can always refuse, but if you don’t ask, you don’t know. If you’ve created leverage by learning about the property and the seller’s situation, you can use this information to ask for things, such as repair of items found during the inspection period or appliances that weren’t listed on the original contract for the house. Don’t make assumptions. Even if your realtor balks at the idea, always ask.

Offer a Quick Close

The faster a deal gets done, the more quickly the home seller can cash out their asset and move on with life. Homes that remain on the market or unsold for extended periods of time become costly to sellers (especially if they’re unoccupied) and start to decline in condition. Offering a quick close builds confidence with the seller as it means that there’s less time for things to go sour with the deal. If you’re situation allows for this negotiation tactic, you might be able to either lower your price or get other benefits in exchange.

Make an As-Is Offer and Ask for the Furniture

If you want to make a reasonable but low offer on a property, consider the pros and cons of presenting an “as-is with right to inspect “ offer. The upside is that you can walk away from the deal if the inspection frightens you. The downside is that what you see is what you get, leaky plumbing, termites, mold and all. If you really want a property and are willing to take it as-is, but aren’t really comfortable with the seller’s floor price, ask for the furniture or other non-fixed assets that make the deal more palatable such as a boat or fitness equipment.

Ask the Home Seller to Cover Closing Costs

If you’re apart on price for the home itself, one way to get around the cash crunch and get a deal done is to meet the home seller on price, but ask them to cover all or part of the buyer’s closing costs. Some home sellers might balk, but if they’re able to do this and want to finish the deal with a sale at a particular price point, this technique can work.

Be Willing to Walk Away

Buying a home can be an intensely emotional experience, but at the end of the day it is really just a business transaction. This means you can’t get attached, and you have to be willing to walk away if you’re unable to negotiate with a home seller or if the seller becomes unreasonable. If the seller’s agent senses desperation or over-eagerness on your part, they might interpret that as a signal that they have the upper hand. Silence can be your friend. Hold your cards close and always be willing to walk away.

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How to Bid on a Repossessed Home

With the downturn in the economy, many homes have been repossessed or are known as distressed properties. Bidding on a repossessed home can be a great value and save a prospective buyer anywhere from 10 to 70 percent because banks or government agencies are eager to unload the properties. However, when bidding on a repossessed home, the buyer must remit all funds at the time the auction closes. Unless you have a large cash reserve or are able to arrange a large reserve from your lender in advance, bidding on a repossessed home or distressed property may not be possible for the average consumer. Bidding on a repossessed home is also a challenging process that requires extensive research, so some buyers may want to rely instead on the expertise of a real estate agent.

Two Ways to Bid on a Repossessed Home

There are two options for bidding on a repossessed home:

  • Through a trustee/lien. All sales are made public knowledge. Check your newspaper or contact your local county courthouse. Before actually bidding on a property, you may want to attend an auction or watch a webcast and see how they operate. Do not bid too early or you will only push the price higher.
  • Online. You can also bid on repossessed properties online. Try the websites of Fannie Mae, Freddie Mac, credit unions and major banks. eBay’s real estate section also offers prospective homebuyers the opportunity to bid. If bidding on eBay, you need to know whether you’re bidding on just the down payment or the total amount. Read the fine print, and do your research before bidding.

When you’re ready to bid, contact the lender and make an offer. Read below how to determine the market value and reduce the sales price that’s listed by up to 40 percent. If that offer is declined, resubmit an offer of 30 to 35 percent below market value.

Before Bidding on a Repossessed Home – Research and Inspect

Once you have located a repossessed property you’re interested in bidding on, you need to research the property. Do a title search so you can determine if any back taxes or a second or even third mortgage are due on the property. The winning bidder will be responsible for all debts past due.

You will also want to determine the market value of the property. Look online at your local property appraiser’s office or tax collector’s office. Find recently sold properties that are similar. You can also consult a real estate broker to do this research for you, but they will charge you for this service.

Just as important when bidding on a repossessed property is to inspect the property. Many repossessed homes or distressed properties have fallen into disrepair. If the home needs a lot of work, get an estimate from a reputable contractor. Too many repairs and the home is no longer the bargain you are looking for.

Using a Real Estate Agent Instead of Bidding on Repossessed Homes

Bidding on a repossessed home is challenging and time-consuming. Buying a home is huge investment. Many buyers choose to use a real estate agent to do all the research and background work for them. If this is the route you would rather take, make sure you look for a CDPE (certified distressed property expert). These real estate agents have been trained and certified in dealing with foreclosed or short sale homes.

Should you Bid on a Repossessed Home?

If you have the time and knowledge it takes to do the background research on a repossessed home, you could save yourself a great deal of money off the market value of the home. Keep in mind, however, that you will need to add the cost of any repairs to the home to your bid in order to determine the true savings. If you’re a DIY (do it yourselfer), the savings could be substantial. Doing your homework on the property before bidding is imperative.

Buying a House “As-Is” With Right to Inspect

In this new age of foreclosures and short sales, more and more homes are offered “as-is.” For the prospective homebuyer, it’s now essential to understand what this means. Buying a home as-is sounds like it would be a disadvantage, but it also has a number of benefits that could play to your favor.

First, what does it mean to buy a home as-is? It means that you are buying a home exactly in the condition that it appears, and the sellers aren’t making any warranties about the condition of the property. If there are things wrong with the house, from cosmetic damage to major structural issues, they will be the responsibility of the buyer to repair. In other words, as the house’s new owner, its problems are your problems.

Homes that are in foreclosure and short sales are typically sold as-is. In both cases, the seller is taking a loss on the property and understandably doesn’t want to sink more money into making repairs. In the case of foreclosures, the seller (usually a bank) hasn’t lived in the property and isn’t in a position to know everything that’s wrong with the house. Since foreclosures and short sales frequently occur below market value, it’s understood that the buyer will have to repair any issues at his or her own expense, adding to the costs involved when buying a house as-is.

When houses are considered teardowns or are otherwise in poor condition, it is common to present a purchase offer that is as-is. This communicates to the seller that the buyer is going to invest in the house and expects a lower price because they’re willing to assume full responsibility for everything that’s wrong with the house. For the same reason, it is also common to present an as-is offer when bidding well below the asking price, even if the house being sold is in good condition. In these instances, it indicates that the buyer has fewer hang-ups that may prevent a deal from going through. It also means that there won’t be ugly or expensive surprises for the sellers if issues are uncovered during the inspection period.

Just because a home is offered as-is, it doesn’t mean that the seller can lie outright as to the condition of the property. Regardless of the terms of sale, the seller is obligated to disclose any major issues with the house. Even if you purchase a home as-is, a major undisclosed issue can be found to be the responsibility of the seller, provided he or she knew of them prior to sale.

When a house is being offered as-is, there is always concern on the part of prospective buyers that something is wrong with the house. Once your offer to purchase a home as-is has been accepted, it is still essential to have a full inspection and to use your inspection period wisely. With the inspection report in hand, qualified tradesmen or contractors can come to the property to present you with bids to fix the issues that were uncovered. This will let you know exactly how much repairing your new house will cost and allow you to assess the purchase.

Even if your purchase agreement for a home states that you’re buying the home as-is, there is no reason that you can’t go ask the sellers to make repairs. If it’s an older home, you’ll certainly have uncovered things that they failed to disclose and some things that may cause the house to deteriorate if not addressed promptly. Sellers are not obligated to fix these issues. That said, pointing out nicely that they are sticking points in advancing the deal may encourage them to repair a few outstanding issues or provide a credit to you at closing.

Buying a house as-is with right to inspect can be a hornet’s nest, but most contracts are designed with clauses that allow the buyer to exit an agreement if the property proves to be uninhabitable or simply unappealing after the inspection period. Ultimately, this deal type has few drawbacks and can be a useful approach for getting a great deal on a home. Just be sure to budget carefully and consider all the costs involved when buying a house as is.

Source: http://www.homeslistedincorona.com/miarticles/articleid/46/

New Houses vs. Old: How Do You Know Which is Right for You?

Finding your perfect home is not always as easy process. With the surplus of homes for sale in most cities, buyers may find there are many properties –both new and old – that meet their search criteria. Choosing whether to renovate an old house or buy a new one can be a tricky decision for some.

ImageShould I Completely Renovate an Old House or Buy a New House?

When deciding on which type of house is right for you, it’s important to take into consideration the following factors:

Style – For many, the allure of an older home is its character and uniqueness. Many of the homes being built today are tract houses that lack personality and quality of construction. An older home will have the charm that many buyers are looking for, rather than being a “cookie cutter” model that someone else has. However, they require a lot of TLC that many buyers aren’t cut out for. Knowing whether to choose an old house or buy a new one largely depends on your style preferences. Do you prefer clean lines, open concepts and a modern look, or are you into a more traditional floor plan with closed rooms, built-ins and nooks?

Lifestyle – Think about how you like to spend your free time. Do you enjoy working on projects, building or creating things at home? Or would you rather spend the evenings and weekends outside of the house, traveling, hiking or shopping? If you answered the latter, an old house may not make sense for you in the long-term as they typically require more maintenance and care.

Resources – Aside from the funds needed to purchase the home, do you have the budget and resources to update and maintain an old house? Even an older home that has been updated can be expensive to maintain due to scarce availability of certain building materials and original fixtures. Many buyers become “house poor” after making their down payment and buying a house. With no savings they have little budget left over for these house updates. If you don’t have the resources to dedicate to updating and maintaining the home, it may be a better choice to buy a new house. Newer houses typically need no initial repairs, no additional budget and are move-in ready.

Patience – Old houses have character, but maintaining that sense of charm doesn’t come easy. Unless they were recently updated, older homes require time and energy to restore. Because they were built in a different time period, older houses may require custom or hard-to-fit materials, appliances and fixtures that many contractors are not skilled in using. These material and construction delays can greatly extend your project deadlines.

Knowledge – Are you knowledgeable about construction and home improvement? Knowing how long restoration and maintenance projects will take and how much they will cost is a major prerequisite for purchasing an older home, especially if you’re planning to completely renovate an old home. If you’re tight on budget and resources, are you able and willing to do some of the work yourself?

An older home can be a quality investment with long-term potential and timeless style. A newer home can be a no-hassle, peaceful retreat that doesn’t require extra money or time to move in. If you do the right planning and homework ahead of time, you’ll be able to find the house that fits your needs, budget and lifestyle and relax, knowing you made the best decision in choosing your new home.

Source: http://www.homeslistedincorona.com/miarticles/articleid/41/

Should I Sell or Rent My Home? A Quiz to Help You Decide

To sell or to rent. It’s a tricky question, especially in a down market. If you are relocating or just ready to move on from your ball and chain of a house, renting might make more sense than selling. Here is a quiz to help you decide whether you should sell or rent your home.

Can You Afford to Sell Your Home?

Here’s an example of a situation where a couple had to examine how affordable it was for them to sell their house. The couple knew they wanted to move to a new home, but they live in an area of Florida where houses have halved in value since the peak in 2006 – the same year their house was purchased. As they debated whether to sell their home, they realized that if they chose to sell, they would be forced to take a $150,000 cash loss, not including closing costs. They looked at the numbers and decided they could not afford to sell their home. For them, it made more sense to rent their home and purchase a second home that then became their primary residence. When you rent, you may take a loss on a monthly basis, but you do not have to come up with the cash to satisfy the loan immediately upon sale. If you sell at a loss, then there is no tax benefit.

Can You Afford to Rent Your Home?

Research the going rents in your market using tools like the MLS listings and craigslist.org. Look for comparable properties in your neighborhood or similar neighborhoods to get sense for what your home might bring in as a rental. It is important to take features like square footage, number of rooms and upgrades such as granite kitchen counter tops, location and proximity to desirable schools into consideration while looking for comps. You can also talk to real estate agents and property managers to get their take on pricing. If it turns out that you can’t cover your mortgage with the projected rent, then calculate how much of a loss you can take to still be able to afford to rent the house.

Do You Need Tax Deductions?

You can often take losses and costs from rental properties as tax deductions. In addition to deducting the cost of your mortgage beyond the rental income, landlords can often deduct all expenses associated with the rental, including property management and maintenance fees. Consult your accountant to ensure that you know what the costs and benefits will be from a tax perspective before you make the decision to rent rather than sell your home.

Can Your Credit Take the Hit of a Short Sale?

If you don’t mind sacrificing your credit score for a few years, you can’t afford to rent and you really need to get out of your house, then a short sale is always an option. A short sale is a real estate transaction in which the bank agrees to accept less than the amount owed on the mortgage to release the owner from their financial obligation. For example, if the mortgage on a home is $200,000 and a buyer makes an offer for $150,000, the bank may accept this offer and forgive the additional debt. Besides mucking up your credit, a short sale can also contribute to your tax bill. Often, the forgiven amount (in this case, $50,000) can be added to your tax bill as taxable income. It is important to consult a lawyer or accountant so that you know the details of how a short sale will impact your taxes and your credit before you move ahead.

Should You Sell or Rent Your Home?

Depending on your immediate financial situation and long-term outlook, it can make more sense to rent rather than sell. In some cases, a short sale is the best remedy for escaping an underwater property and moving on with your life. Before you make any decision about renting or selling, be sure to consult a lawyer or accountant for customized consultation so that you fully understand the tax ramifications and benefits given your unique situation.

Source: http://www.homeslistedincorona.com/miarticles/zip/92508/

It’s the Law!

Are you aware that you’re required by law to have a carbon monoxide alarm in your home? The Carbon Monoxide Poisoning Prevention Act was passed by the State Legislature in May 2010 making approved carbon monoxide alarms (CO alarms) mandatory for all California residents.

As of July 1, 2011, all single-family dwelling units with an attached garage or a gas heater should have installed a Carbon Monoxide alarm within the home and all other dwelling units have until January 1, 2013 to comply. What is the definition of a dwelling unit? Generally, a dwelling unit is where you sleep! It is a single-family dwelling, duplex, lodging house, dormitory, or dwelling unit in a multiple-unit dwelling unit building meaning any place where people live is covered under the law.

What is Carbon Monoxide (CO)? Known as the “silent killer”, this colorless, odorless, and poisonous gas kills approximately 500 people and sends nearly 20,000 more to the hospital each year. CO is naturally produced from heaters, fireplaces, furnaces, and many types of appliances and cooking devices when fuels burn incompletely,  which is why proper ventilation is imperative when using these devices. Carbon Monoxide poisoning is avoidable and preventable if each home takes the necessary procedures and remembers these keys to safety: Inspect, protect, and detect.

  • Inspect your fuel-burning appliances at home such as furnaces, hot water heaters, and stoves that require yearly maintenance.
  • Protect your family by obeying the law and purchasing an approved Carbon Monoxide alarm. Alarms that are approved by the State Fire Marshal can be found at: http://www.osfm.fire.ca.gov.
  • Detect! If your alarm detects any sign of Carbon Monoxide immediately escape outside with your family and dial 9-1-1.

Carbon Monoxide alarms should be installed outside the sleeping area in a dwelling to alert occupants in an emergency. Smoke alarms/detectors and Carbon Monoxide devices are required by law and should be inspected regularly.

For more information regarding the new Carbon Monoxide Poisoning Prevention Act, visit the State Fire Marshal’s website, or contact the Corona Fire Department at (951) 736-2220. Take steps to avoid the “silent killer” and ensure the safety of your family by installing a carbon monoxide alarm today.

For Your Information
With lots of rich foliage and tiny white flowers, the spider plant is easy to grow as well as benefiting its owner with its ability to absorb benzene, formaldehyde, carbon monoxide and xylene.

Source: http://www.innercirclecity.com

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