Negotiating to Get Best Price when Purchasing a Home
There are loads of real estate deals available for potential buyers in today's housing market. Whether you are looking into the bank owned homes (REO's), short sales, builder foreclosures, auction properties, or just a truly motivated seller - there are literally hundreds of great buys for just about anyone looking to purchase in the St Cloud area.
But what if that great home is a traditional sale with an actual person as the seller? How are you going to get the screaming deal on those homes?
Chances are likely that you won't get the lowest price on a traditional sale. Instead, you will get piece of mind in place of the monetary gains (i.e. accurate disclosures, better kept home, etc.). Even though you might not get the huge discounts on these homes doesn't mean that you can't get a really good buy. But before you write that $100K offer on a $150K home, think about the other side of the equation.
1) Try to find out why the seller is selling. If they don't need to move, they more than likely won't even slightly entertain a lower offer.
2) How are they priced against the market? If they are competing with a bunch of foreclosures in their development, did they price accordingly? If they are only a couple of thousand dollars higher than a similar bank owned property, they probably don't need to come down that much.
3) How much did they pay for their home? Having a ballpark estimate of what someone owes on a home can help you figure out how much they might be willing to lose. While this has no bearing on value, it might help you better understand their bargaining position. If they owe $100K on a home and they are sitting on returnable bottle boxes instead of furniture - they probably can't afford to write a $10-20K check at closing.
Let's look at a case example (this is a fictitious sample).
Owner is selling a home for $125,000 that they bought for $120,000 back in 2003 with $3,000 in closing costs added in for a mortgage of $123,000. Will they take a $100,000 offer? Or will that offend the seller into not negotiating?
There isn't enough information there to determine what is the best situation. What you need to know (if you can find out) is why are they leaving? What is the price of the homes selling around them?
There are many variables that come into play when trying to figure out what is the best price that one can purchase a home. Before you submit an offer that will cost you more in the long run, do some homework. An offer of $130K on a $140K home can get a home for a buyer cheaper (after counter-offers are completed) than an offer for only $100K on the same home.
Consult your real estate professional to learn more.
Jason Tangen - GRI, e-PRO - Real estate broker associate with Edina Realty in St Cloud MN.
http://StCloudEdina.com - Get a free list of the bank owned (REO) properties available on the St Cloud MLS.
http://JasonTangen.EdinaRealty.com - Search for Open Houses in North St Cloud.
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