Hands On Real Estate Investing

When you receive an offer for a piece of real estate, that is just the start of negotiations. The offer price may or may not be close to your asking price, but price is just one of many items to negotiate. If the offer price is less than your asking price, you may decide to lower your asking price and make a counteroffer. However, we believe it is always wise to get something in return when you make a concession. For instance, if you do lower your asking price, ask the prospective buyer to adjust the settlement date so you don’t have to pay next month’s mortgage while waiting for settlement. If your mortgage is $3,000.00 and the proposed settlement date is the 9th of next month, offer to lower your asking price by $3,000.00 and propose a new settlement date of 10 days earlier so you don’t have to pay the next month’s mortgage. There are several areas of negotiation:

1. Price
2. Settlement Date
3. Closing Costs (loan points, state/county transfer taxes, etc)
4. Home Inspection/Repairs

If the prospective buyer includes a home inspection contingency in the offer, they may or may not ask you to pay for repairs identified during the home inspection.  If the prospective buyer does ask you to make repairs identified by the home inspector, ask if they can pay all of the state and/or county transfer taxes instead of splitting them 50/50, which is the norm. [Note: check with your state/county authorities to determine if it is legal for the buyer to pay all of the state and/or county transfer taxes.]

The ultimate goal of negotiations is to keep the buyer on the hook by continuing negotiations until both sides come to an agreement. It may take days or weeks to come to a final agreement. When you propose a change, your realtor will draft an addendum to the contract that you will sign. If the buyer agrees, they will sign or make a modification to the addendum and sign.

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The opinions expressed herein are solely those of the Author/WebMaster. Before taking any action, please consult your real estate, financial, and legal advisors.