Contract Writing as a Negotiating Tool - Part One

Showing Property

Each time an agent sets up an appointment there is the opportunity to connect with the seller of that property and develop a connection that might have lasting consequences.  Simple courtesy such as:

• giving a more narrow window of showing times,
• being flexible with your schedule,
• understanding sleeping babies,
• and honoring your showing commitment can go a long way towards a happy transaction down the road

While showing the property if the seller is there it pays off to be pleasant and respectful of the property.  It's hard for someone to like you when you've just ripped the decor to shreds and wrinkled your nose at the pet odors!

Right then and there, imagine you might write an offer on this property and that seller isn't feelin' the love!

If there is interest, it's wise to immediately engage the listing agent to ensure there are no other offers on the home and to find out more specifics on terms that might help get your future offer through.  One of the things I always like to do is ask for a courtesy call if any other offers do come through, even if this is a property that is just "on the list."

Writing the Contract

The first thing to understand is this is a risk sharing document!  There are two sides to the transaction and both are just as nervous for different reasons.  The Golden Rule plays a big part in how far we go in negotiations. 

The kinder we are are throughout the entire process the better positioned we will be when there are problems...

In our area, we first make a choice of contract to use.  Generally in the Bethesda neighorhoods and always in DC we use the Regional Contract.  But many agents in the upper part of the county use the MAR.  Both have strengths but we all tend to get used to one or the other.  For a property that we think is going to have property condition issues such as windows, it might be helpful to use the MAR because windows are included.  Regardless of what the home might dictate, though, it's what the listing agent likes that we really want to know because keeping him/her in a comfort zone can go a long way towards winning in a multiple offer situation or just getting through an um, less than stellar contract! And at this point we want to know if the coast is still clear to write a contract:

• Any other offers in? 
• Any other items to know that we haven't already sniffed out about the seller's needs. 
• Closing date need to be specific? 
• Do they need to find a house first? 
• Can you offer a rentback?

Step 1- Make Sure the Lender Info is Strong

Most buyers today who are buying real estate in Bethesda know the value of a strong pre-approval letter but there are ways to strengthen that even further:

• Does the agent have a favorite lender?  Imagine how much better they feel about your offer when their favorite lender gives you the green light!  Right away you've taken an enormous amount of fear out of the transaction.
• Have the letter be specific to the property.
• Put your credit scores right in the letter.  Yup, right there for all to see because of course they are good :)
• State which loan program you are using.
• State the ease of getting the loan through and limit what it is subject to.
• If showing proof of cash, have TODAY'S bank statements or money management statements so the seller is assured that the cash is there.
• If there is a gift letter, show the money is in place.

In multiples this is imperative but with our current spate of low offers it's vital to show the seller you are serious and understand that after your contingencies have expired all that money is at risk.

Continued in Part Two...