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Your agent must also find out if other offers are on the table. Your position is stronger if there are no other offers. The seller may be less likely to bend on price concessions or repairs if there are other offers.
Have your agent pull up the most recent CMA (comparable homes recently sold or on the market) within a reasonable radius of the home, so you can sculpt your offer price. Be sure that you are comparing apples to apples in terms of updates, size of the home, amenities, location, schools districts, etc.
Once these steps are made, you are ready to write an offer.
Making the offer
Make yourself think like the seller. It helps you anticipate what the seller will accept in price, terms, and other conditions. By considering the seller’s position, you will likely create an offer that is either accepted or strongly considered.
Your offer should be clear on the terms, closing dates, repair requests or other conditions the seller needs to meet and it should be accompanied by a letter from your lender that you are preapproved to buy the seller’s home. Include a cover letter summarizing your strengths as a buyer in terms of creditworthiness, flexibility in closing, and the strength of the offer.
Don’t insult the seller with an offer that’s too low or requires too many concessions. The seller may be nostalgic about his or her life in the house and may not like the idea that you want to remodel.
The only thing a seller can’t argue with is a strong set of comparables that show the home is overpriced or out of date. These are homes that have sold that are nearby (within two blocks) and similar in age, size and features. If you can show that a similar home has sold within the last two months for less than the seller is asking, that’s good.
Be sure all conditions, repairs, etc. are agreed to in writing. Some sellers may feel that a handshake covers a promise, but it’s essential to be clear on paper what is expected and when. A seller’s promise to paint should be included as an addendum to the contract and include all details, such as primer, exact color and type of paint, how many coats, and when the work will be finished for inspection.
Negotiating after inspections
The offer is negotiated and accepted, the earnest money is at the escrow agent’s office. Now the inspections occur, and this is where the contract negotiations can break down.
No home is perfect, not even brand-new construction. During the inspection process, the inspector is usually required to tell you about any condition of appliances, heating and cooling systems, roofs, electrical and plumbing systems, etc, and if your future home is up to current city codes.
Sellers are usually not required to bring a house completely up to current local building codes. Negotiate a repair only when a system is unsafe or a major repair is needed to make the system operate effectively.
As long as the seller has a reasonable explanation of what your position is and why, and communication remains open, the seller should have as much desire to make the contract work as you do.
Written by Blanche Evans on Thursday, 29 May 2014 1:12 pm