Residential real estate contract negotiations can be nerve wracking, especially when you submit an offer below the asking price. The definition of a low offer remains subjective, and MSN reports that any offer that provokes seller anger or outrage could qualify as a low-ball offer. Although low offers risk outright rejection, you can make such offers attractive by standing firm on your price and negotiating on other contract items that benefit the seller.
Instructions
1. Remove the home inspection contingency. Sellers with older homes could be willing to accept a low offer that doesn't require them to make any repairs. Base your offer to remove the home inspection contingency on problems you see when you view the home and communicate those problems to the seller. You can also conduct a home inspection and negotiate a lower price based on inspection findings. This approach generally works for buyers who have the skill, knowledge and financial resources to repair homes on their own.
2. Make a cash offer and ask for no closing cost credit in exchange for a low price. Sellers routinely accept offers from buyers without confirmed loan approval. Sometimes, buyers waiting for loan approval don't have the cash to pay closing costs and ask sellers for closing cost credit to seal the deal. If a buyer's loan application gets declined, the contract dies and the seller's home has to go back on the market. Promising to bring cash to the closing table and not asking the seller to pay your closing costs guarantees the seller that she'll get her money and close the house on time.
3. Offer to close quickly. Sellers who need to relocate for jobs could find attractive those low offers that get them out of their home quickly. Buyers paying cash have more flexibility to set closing dates than buyers who need loan approval. Buyers who need loan approval, however, can gain leverage by getting approved for a mortgage loan, rather than preapproved or prequalified, before making purchase offers. Begin the loan approval process by allowing the loan officer to pull full credit reports and by providing him with payroll stubs, tax returns and bank statements.
4. Hire an aggressive buyer's agent. Buyer's agents take classes to learn the art of negotiating on behalf of the buyer. Training, however, does not guarantee that an real estate agent has the drive to get your low offer accepted. Ask people in your sphere of influence, including your neighbors, to recommend several buyer's agents for you to interview. When you interview the agent, communicate your goal -- to get a low offer accepted -- and ask to see copies of closed listings where she successfully negotiated low offers on behalf of her clients.
Tags: loan approval, home inspection, cash closing, closing cost, closing cost credit
