(CNNMoney) — Home prices fell to their lowest point in more than a decade in January, but that helped to lift the pace of home sales, according to a report from an industry trade group. http://cnnmon.ie/x3hrRp
Negotiating the transaction is usually the most complex aspect of buying a home. At the same time, it’s the one that can involve the most creativity and the most impact on the bottom line – i.e. whether you end up with the home and at what price. That’s why it’s important to have an experienced and savvy REALTOR® who has successfully worked through many different transaction scenarios. That said, what follows are a few strategies for negotiating a good deal in a buyer’s market like this one, all of which involve the following key fundamentals:
For you, as a buyer in a buyers’ market, it all starts before you even make an offer, the first time you see that home you think might be THE ONE. It’s important that not give yourself away to the listing agent or seller by getting too excited about your “find”. If anything, ask a few questions, maybe take a few notes, and let your REALTOR® do all of the talking. The point is that ideally you’re trying to strike a balance by appearing, on the one hand, to be a qualified, motivated buyer while, on the other hand, not appearing to be too eager. Several ways you can demonstrate you’re a serious buyer:
Not only will this approach show that you’re qualified and motivated, it will place you in a stronger negotiating position overall. The sellers won’t want to lose you and will be more inclined to reduce their price a little and/or make some concessions with respect to terms.
If, through the negotiations, you can find out more about the seller’s situation – their motivation and priorities – you’ll not only improve your position, but you’ll also be able to resolve any obstacles more creatively and sensitively. For instance, if a seller is adamant about a certain closing date, you might be able to get them to concede some other terms including price. Or if they are skeptical about your ability to obtain a loan in this current mortgage environment, they may value a higher downpayment more heavily and concede on sales price. There are no “one size fits all” approaches to negotiating. In principle, though, the more you know about the seller’s priorities, the more you’ll be able to work with them in order to achieve your own goals. While a home’s sale price is generally the focus of negotiations, often sellers will have needs such that the terms of purchase can significantly influence the final deal. Here are some elements in the purchase agreement that you might put on the table for discussion:
The contract delineates these terms clearly, but still should be carefully reviewed and fully understood by both you and the seller so that you’re on the same page and the negotiations move forward.
Even in a buyers’ market like this one, if you’re really interested in buying the home you’re negotiating over – if it really is THE ONE – you should be willing to make some compromises to make the deal happen. If that’s not the case, then you should listen to your heart and consider looking for another home.
In summary, the key to successful negotiations is to remember your priorities and respect the seller’s – don’t let small things get in the way of your better judgment, and don’t ascribe nefarious intentions to the sellers’ actions. They are doing exactly what you are doing – negotiating for the terms that are in their best interest.
Once you have a pending agreement with the seller, it’s time to go back to your chosen lender to finalize your mortgage details so you can close the deal. This means finalizing your down payment, interest rate, regular payment schedule and any other financial conditions associated with the closing. As noted in the section on loan pre-approval, if you’ve already been qualified with a lender for a certain loan and home purchase, this phase of buying your new home should be a relatively straightforward matter that centers around finalizing the loan details and signing the mortgage papers. That said, it can definitely provide peace of mind if you have an experienced REALTOR® by your side at the time to explain every aspect of your mortgage. Indeed, your future may depend on it. As the old saying goes, ‘buyer beware’. Particularly in these times, when so many buyers are suffering the consequences of having not fully understood their financing decisions, it’s crucial for you to work with people you trust. In this regard, a good REALTOR® can be a true friend for life. For more information on the loan process itself, see my next post detailing the steps involved.
Read previous installments of this series here:
The home buying process – Overview
The home buying process – Step 1: Define, Research, Plan
The home buying process – Step 2: Find a Realtor
The home buying process – Step 3: Pick a Lender and Get PreApproved
The home buying process – Step 4: Find THE Home
The home buying process – Step 5: Make An Offer And Negotiate With The Seller
Now that you’ve found the home you’d like to buy, it’s time to make an offer. Your local real estate association,
The Perfect Pad...
working with legal counsel, has developed the contracts that are used for transactions. Here in Caifornia, the California Association of REALTOR®s rewrites and updates these contracts every couple of years – editing to eliminate any ambiguitities that may have led to misunderstandings or lawsuits. They not only enable you to specify a sale price but they include many clauses for specifying various terms of the purchase, such as the closing and possession dates, your deposit amount, time periods for inspections or acquiring a loan, etc, and other conditions. You should carefully review these clauses with your REALTOR® to ensure you understand the subtle nuances of the contract and to make sure they express the ideal terms for your offer.
In addition to drawing up the contact for you, your REALTOR® should address all your questions about the offer process. Take advantage on their knowledge and expertise and make sure you take the time to go over it carefully and understand the process fully. It surprises me how many people do not make this a priority…
Once you’ve written the offer, your REALTOR® will present it to the seller and the seller’s representative. This is ideally done in person, so your agent can “pitch” it to them, advocating on your behalf and making a case for you as a stong and viable buyer. At that point, the process depends largely on the market you’re in, the needs and priorities of both you and the seller, and the negotiating skills of the agents on both sides. The seller can accept your offer, reject it, or counter it to initiate the negotiation process. Successive counter-offers, with deadlines for responding and meeting conditions, will be exchanged between you and the seller until a mutually-satisfactory agreement is reached or the negotiations reach a dead end.
Negotiations can involve many factors, many of which will be discussed in greater detail in a later post Negotiating The Deal on a Home Purchase, to follow soon.
Read previous installments of this series here:
The home buying process – Overview
The home buying process – Step 1: Define, Research, Plan
The home buying process – Step 2: Find a Realtor
The home buying process – Step 3: Pick a Lender and Get PreApproved
Simply put, key to the home search process is knowing what you’re looking for. Among other things, that means distinguishing between “must-haves” and “like-to-haves”. To help you to target your search and define your home preference priorities, look at the form at the bottom of this post.
That said, here are a few recent facts about the search process that might put your experience in perspective:
• More than 90% of buyers use the Internet to search for homes*
• The typical buyer searches for 12 weeks and views 12 homes*
• 81% of buyers view real estate agents as very helpful in the search process*
*National Association Of REALTORS® Profile of Home Buyers and Sellers, 2010.
There are many benefits to starting the search process at a real estate website like REALTOR.com. Better yet, use your own REALTOR®’s website, assuming they have a direct IDX feed, i.e. a direct feed to the local MLS database. Moreover, by using your REALTOR®’s website, he or she is able to view your saved searches and “favori te” properties. You can view many homes and their details, take video tours and access neighborhood info. Sites such as redfin, zillow and trulia are often out of date, so it’s better to avoid them or you may happen upon your dreamhome only to find out that it closed several months ago.
While doing homework online is a huge time saver, it’s also important to view homes in person. Even when property details and videos are provided online, homes can actually be very different in terms of layout, design, workmanship and other aspects than they appear. In addition, you should ideally view homes with the help of your REALTOR®, not simply on your own at an open house, as she may notice things you might miss, provide expert analysis, and act as an impartial sounding board. Some find it helpful to start by visiting open houses on their own, but once you start zeroing, get your agent to schedule appointments and accompany you.
Main Requirements
Price range: ______________________ Lot size: _________________________
Area: ___________________________ Square footage: ___________________
Detached/Attached: ________________ Number of bedrooms: ______________
House style(s): ____________________ Number of bathrooms: ______________
Age of property: ___________________ Garage: __________________________
Specific features
(e.g., site location, view, large lot, pool, fireplace, basement, garage size, distance to school or work, additional room preferences, layout, etc.):
___________________________________________________________________
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___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
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Additional comments
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Read previous installments of this series here:
The home buying process – Overview
The home buying process – Step 1: Define, Research, Plan
The home buying process – Step 2: Find a Realtor
The home buying process – Step 3: Pick a Lender and Get PreApproved
The steps involved in the process of purchasing a home vary from state to state. Regardless of where you are buying, for most, it the single biggest investment in one’s life – and often represents the largest debt you will ever incur.
In the state of California, particularly in today’s ever-changing real estate market, home buyers require many tools and resources to find their fa
mily’s dream home and close on it smoothly. As a North San Diego County real estate agent, based in Del Mar CA, one of the steps that is often overlooked is researching and securing home owner’s insurance prior to releasing contingencies. While it may seem like a trivial step, there are a number of pitfalls you may encounter – and you should be sure to have all your ducks in a row, well before the deadline hits, and you venture beyond the point of no return.
Here are a few of the things that can cause a problem in obtaining insurance:
The list goes on, but the point is, it is critical to shop for and get a commitment for an insurance policy well before you need to release contingencies and commit to moving forward. If you release contingencies without having done so, you may end up not being able to perform on the purchase and risk losing your deposit – potentially thousands of dollars!
For more information about the process of buying a home in North San Diego County, read our series here:
The home buying process – Overview
The home buying process – Step 1: Define, Research, Plan
The home buying process – Step 2: Contact a Realtor
For a more personal consultation, give us a call: 760-815-1318.
Shopping for a lender and a loan is NOT something to start doing after your offer is accepted, when you’re on a tight 
timeline that contractually MUST be met. Choose someone before you find the home you want to buy – someone not only with competitive rates, but with whom you have a rapport, who is creative and knowledgeable, who does not over promise and under deliver. Again, a recommendation from a trusted friend, colleague or family member is usually the best way to find a good lender or broker. Ask the person recommending about their referral’s communication skills, their timeliness, and their knowledge. A good mortgage broker will help you analyze the particulars of your financial situation and goals and give you options that are specifically suited to you.
The broker will also advise and guide you throughout the process, making sure you know not only what you qualify for and what you need to do to secure the loan, but coordinate the various people involved – from appraisers to underwriters to insurance agents –and keep them on track. As soon as you start viewing homes with the serious intention of buying, interview and select a mortgage broker.
It has become convention to submit a prequalification letter when presenting or submitting an offer. The prequalification process involves a brief conversation regarding your financial situation including income and assets with your lender, and an assessment of the kind of loan product you would qualify for. On the basis of this examination the lender will provide you with a letter detailing how much you can borrow to buy a home. This prequalification is still subject to verification and credit check.
While having a prequalification letter to submit with your offer is good, a preapproval letter is even better. The pre-approval process generally involves meeting with a lender, filling out an application and authorizing the detailed examination of your current financial situation and credit history. You submit all necessary documentation and get in return a much more sold commitment letter regarding your ability to obtain a loan.
Real estate financing is available from many sources, and an experienced REALTOR® will be able to suggest lenders with a history of offering excellent mortgage products and services. For more information about the benefits of pre-approval and the loan process in general, give us a call.
To read previous installments of the series, click below:
The home buying process – Overview
The home buying process – Step 1: Define, Research, Plan
The home buying process – Step 2: Find a Realtor
The home buying process – Step 3: Pick a Lender and Get PreApproved
Picking a good agent is perhaps the single most important step in listing your home for sale. A quality professional means the difference between money in your pocket and a stagnant listing, between netting more versus netting less, a smooth escrow rather than one with lots of snafus, a stressFREE versus a stressFUL transaction.
Ideally, it is best to have not only a great agent, but a great agent working under the umbrella of a great company such as Coldwell Banker. My partner Maxine Geller and I 
have had the good fortune of being affiliated with Coldwell Banker for over 10 years. There are countless reasons why we why we chose to associate with this fine company, not the least of which is its number one market share position in Southern California. Many of these reasons benefit not only us as agents but you as our clients. Here are the top 12 reasons listing with Coldwell Banker benefits you.
1. Name Recognition: 98% of the general public recognizes Coldwell Banker as a real estate company based on recent surveys.
2. 100 Years Experience: Coldwell Banker has been in business for over 100 years and has national/international experience.
3. Internet Presence: Coldwell Banker has a strong internet presence due in part to its partnership with Realtor.com which insures better shelf position due to requirement to have at least 18 photos of property for each listing. Also, Coldwell Banker.com and CAMoves.com are recognized as leaders in the industry.
4. Cutting Edge Technology: Coldwell Banker is the first real estate company to develop its own YouTube channel for real estate searches, OnLocation.
5. Lead Router: Coldwell Banker invested in the development of a system that notifies listing agents, via their cell phone, that a potential buyer is interested in obtaining more information about their client’s property within seconds of the time the buyer submits the request.
6. Risk Management: Coldwell Banker maintains a strong risk management team on staff to support agents in the field.
7. Training: Coldwell Banker maintains an in-house education team that coordinates on-going training for agents and staff.
8. Cutting edge Print Marketing: Coldwell Banker conducts national promotions and provides agents easy access to cutting edge high quality print marketing through their affiliation with the Merrill Corporation and Impact Marketing.
9. In-House Email Marketing Program: All Coldwell Banker offices participate in an interoffice email marketing program to promote and exchange information about their client’s wants, needs and properties for sale.
10. Concierge: Coldwell Banker provides clients with access to referral services that have been investigated and prequalified.
11. High Level of Professionalism: Coldwell Banker prides itself in maintaining a high level of professionalism among its agents and staff that is well recognized in the industry.
12. Affiliated Services: Coldwell Banker has established relationships with their affiliated services including escrow, title, home insurance and mortgage services.
To find out more about the advantages of listing with a superior team, the Geller-Meier Team, at a superior company, Coldwell Banker, give us a call. We’d love an opportunity to earn your business.
…mortgage rates at their lowest level for 2011 after declining for the fourth consecutive week. The 30-year fixed-rate averaged 4.63 percent, and the 15-year fixed averaged 3.82 percent.
Buying real estate is a hugely complex business transaction. It involves not only the purchase of one of the largest assets most will ever buy or own, but hundreds of details which are critical in terms of their cost and their liability.
With all the unique opportunities and potential pitfalls of the current market, it’s even more important for you to contact a professional in the field. Because REALTORS®, 
i.e. real estate agents who are members of the largest trade organization, the National Association of REALTORS®, are held to a higher standard than your average agent, it is in your best interest to choose a REALTOR® once you’ve definitely decided to buy.
In choosing a REALTOR® to guide you through the property search, financing, negotiation and transaction processes, you should consider their local market knowledge, experience and track record.
A few tips on how to find a great real estate agent –
As your agent spends time with you, she will begin to get what’s truly important to you. A perceptive agent will read between the lines, sometimes picking up on priorities you didn’t even know you had. A good agent will save you money and protect your interests. A good agent wants you to be thrilled with your home not just on the day you close and get the keys, but 2 months and 2 years down the road. Buying a home is a major journey, sometimes through treacherous waters – make sure you are choose your co-captain carefully.
Read previous installments here:
The home buying process – Overview
The home buying process – Step 1: Define, Research, Plan
And subsequent installments here:
The home buying process – Step 3: Pick a Lender and Get PreApproved
The home buying process – Step 4: Find THE Home
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