Jan. 23, 2012
Many buyers who are fortunate enough in this economy to make a cash offer feel that cash is king and that they are owed a price concession because they are able to pay cash with no mortgage which means no lender issues, appraisal contingency and a quicker and smoother closing. However, not all sellers agree with this. Sellers who feel there home is valuable and desirable may prefer to work with an offer from a well-qualified buyer who will need to obtain a mortgage but who will also pay a higher price. It all depends upon the sellers’ situation. Therefore, before presenting an offer and negotiating it is recommended that you try and understand as much as you can about the other party and their situation.
For example if a seller is relocating and moving to an area where home prices are higher, they most likely will go for the highest-priced offer in a multiple-offer situation rather than a lower but all cash offer. In this particular situation every penny will count for the seller when purchasing their new home. However, if it is an estate or inheritance property the seller may want to close on the home as quickly as possible, with as few headaches as possible and in this case would most likely choose the cash offer over a higher priced offer with a mortgage.
If you are a buyer and house hunting in this market it may be very likely that you don't want to negotiate. However, the only time this is usually effective is if your offer is the only offer and if there is little or no activity on the property. And even in this scenario if the house is priced correctly, it may only be effective if you make a full price offer. In this market you are better off assuming there will be some negotiation involved and not putting everything upfront at once. When negotiating on a home it is more than just price. The fewer contingencies you have, the more money you are putting down and the cleaner the contract, the more attractive it will be to the seller. One other point - if you are a buyer in this market - don't waste your time with sellers who are firm at an unreasonable price. Continue to look at homes and wait until these sellers become more realistic.
It is very important to have an expert buyer's agent to guide you through the transaction. The agent can advise you on the best way to proceed in order to secure a successful outcome. For further information, please do not hesitate to contact me at: email@example.com or via cell phone at 732-757-2522. My team is dedicated to providing expert advice and guaranteed results.
Posted in General Real Estate Information