Monday, February 16, 2015

Home Buyers, Here Are Your Common Negotiation Points

When you find your dream home and are ready to write the offer, price is usually the first thing you think about when it comes to negotiation. But price isn’t the only negotiation point on the table. Here is a list of other points to consider in your offer:

  • Option period. The option period gives you, the buyer, the unrestricted right to terminate the contract during that period. Sellers usually are monetarily compensated in exchange for this right. How much the compensation is and for how long the option period lasts are negotiable. In a fast-paced market, sellers like to see shorter inspection periods, rather than longer ones. Still you need to make sure you give yourself enough time to get the home inspected and finish other due diligence.

  • Contingencies. Most contracts include contingencies such as financing or the sale of other property. The financing contingency is the most common. However depending on the market, contracts without contingencies are sometimes more favorable.

  • Title Policy. The title policy is typically a seller’s expense, however, it can be negotiated. If you find yourself in a multiple offer situation, paying for the seller’s policy may make your offer more attractive. Your Realtor can advise you on this negotiation strategy

  • Survey. Most lenders require a valid survey. If the seller has a survey, that survey can usually be used again if there have been no major changes to property footprint. Examples of changes include moving the fence line, adding a pool, extending the patio, etc. If a new survey is required, this is typically a seller’s expense, but it can be negotiated.

  • Residential Service Plan. We recommend that buyers ask the seller to purchase a residential service plan. This is a common request and benefits both the buyer and seller. A residential service plan is also sometimes called a “home warranty.”

  • Buyer Assistance. Sometimes you need help paying for your closing costs. There are several ways to negotiate this point. Your Realtor can advise you based on your situation and the particular property you’re interested in.

  • Repairs. We recommend that buyers have the property inspected by a state-licensed home inspector. This inspection usually takes place during the option period. If the home is in need of repairs, your Realtor will you advise how to proceed.

  • Possession. It is customary for the buyer to give the sellers three days after the sale has closed to move, if they haven’t already. However, if the seller needs to remain in the home longer, this can be negotiated. For some sellers, this may be as important as monetary negotiation points. For example, they may be waiting for a new home to be completed or for a school break. If the home is vacant, possession is rarely an issue.

  • Non Realty Items. You can ask the seller to leave specific items that are considered personal property. Common requests include wall-mounted TVs and big ticket appliances such as the refrigerator. If you’d like to ask for personal property, your Realtor can advise you on the request.

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