In my last article I discussed "The Offer", this week we will talk about counter offers. Once an offer is made on a piece of property it is very typical to get a counter offer. These counter offers may go back and forth several times before a deal is struck. It is during this process that decisions will be made that will impact the bottom line in your new property. There are several items that can be negotiated in the offer and counter offer process that will effect the bottom line.
The seller's price is the most common point of negotiation. Buying the property at the lowest possible price is the easiest way to lower your bottom line. While negotiating price, I always suggest an offer that starts a dialogue on price, but doesn't insult the seller. As a buyer, you want to entice a counter offer price that is lower than the asking price. You do not want to elicit a response that includes no counter offer. Remember that negotiating for a property is adversarial in nature. You want to pay the lowest price possible for the property and the seller want to sell for the highest price possible.
Repair work is another negotiable point that can effect the bottom line in your new property. You can make your offer conditional upon repairs to be completed before closing. These repairs can be as simple as a little touch up paint to something involved such as replacing the heating system. Any repairs that are done before your purchase will affect your bottom line, though many buyers will use needed repairs as an excuse to make a lower offer instead of actually asking for the repairs to be done.
Closing costs are negotiable also. Closing cost can run into thousands of dollars. Any of these costs that you can shift to the seller will affect your property’s bottom line. Some types of loans require seller participation in closing cost and first time home buyers sometimes lack the financial resources that complete closing costs require. In these cases, it is fine to offer a bit higher sales price in exchange for the seller paying some of the closing cost. I know that this seems counter intuitive, but you want the property, right?
There are several fees that are paid to parties involved with the transaction that can be negotiated. They often appear in the closing cost and include origination fees, home inspections and title company fees. All of these fees can be negotiated and effect your property's bottom line.
Other personal items can be part of the offer and counter offer. These could include certain appliances, prices of furniture and even portable out buildings. There may be sentimental value attached to personal items, so be careful when you decide to include them in your offer or counter offer. You don't want to lose the property of your dreams over someone's grandmother’s hutch.
Keep these things in mind while negotiating with your counter offers. Try to get the best deal possible, lower your bottom line on the property, and always negotiate in good faith. My final piece of advice is always consult a realtor or attorney when doing any real estate transaction.