Real Estate Purchase Contract Negotiations
This is where the information you learned from questioning the seller can be quite useful. For example, if the seller has been transferred to another city, they may be very motivated to sell.
There are many different strategies for negotiating, but the one that I have seen produce the best results is not all that difficult. It starts by studying the market data to determine what the fair market value is for the house.
Your objective is to make your offer at a price that is lower than what the seller has in their mind as their "bottom line", but is close enough that they say, "Oh, I guess we will go ahead and take it".
Keep in mind the three basic options that a seller has when presented with an offer:
The seller will always want to accept the offer if possible, because if they sign it, they will have a deal that the buyer is bound to. If they make a counter offer, the buyer is "off the hook", and is no longer obligated contractually.
The price is always the focal point of the offer, but there are lots of additional areas that you need to address and pay close attention to also. In your offer, be as specific as possible about every aspect of the transaction. Details that are not clear or are left out can lead to big problems down the road.
Some of the items that you want to be sure to spell out in detail when putting together your offer include:
One area where you need to be especially careful is contingencies. These are things that must or must not happen in order for the transaction to be valid.
For example, the purchase may be contingent upon you getting approved for your financing, on getting a favorable inspection report, or many other things. Make sure to spell out the contingency clearly, as well as what specifically will happen if the contingency is or isn't met.
The important thing is to keep your goals in mind throughout your negotiations. This will guide you, and help keep you from making bad decisions based on emotion.
If you start to feel pressured or uncomfortable, step back and review your goals. Don’t let yourself be bullied around. Remember that the seller usually needs to sell that house a lot more than you need to buy it!