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Sellers: Protect Yourself when Negotiating with Buyers

By
Real Estate Agent with Keller Williams Realty

The phone rang and it was Gustavo, an investor who purchased a fixer upper 6 months earlier.  He updated the house, put it on the market, received an offer, but had a problem and needed help.  It has been in escrow for two months and the buyer just asked him for another two weeks.  They were having trouble with their Zero Down loan and Gustavo wondered if it would ever close.  With lenders tightening their guidelines he was worried that less people can afford homes causing prices to drop even more.

This scenario has come up more recently creating problems during escrow.  Some lenders pre-qualify buyers then change the requirements without any warning, sometimes just days before the sale is final.  Sellers, like Gustavo, wonder if this will cause the prices to go down.  Currently the market prices are on a downward trend and lending guidelines are changing on a daily basis.  However, there are some things people can do to put themselves in a position of strength when negotiating with a buyer with a low or no money down loan, or any loan for that matter.

  1. Resist Greed.  We all want to sell our homes for top dollar.  Sometimes weak buyers will offer a high price but they can't actually close the deal.  It's important to look at the whole picture and take the strength of the buyer in account when evaluating an offer.  This is especially important when the purchase of your next home depends on successfully selling your current one.
  2. Question the Lender.  It's OK to ask the lender questions about the qualifications of the buyer.  Typically the buyer's agent will accompany the offer with a pre-qualification letter, but don't just take it at face value.  Ask your realtor to follow-up to see if the lender has verified the buyer's assets, employment, credit scores and money for down payment and closing costs.  Prudent lenders collect this documentation from their clients up front.
  3. Involve Your Realtor. If you already have a realtor, talk with her to come up with the best strategy to keep tabs on the buyer so any challenges can be dealt with early on.  If you don't have a realtor yet, make sure to ask about this when interviewing them.  What kind of research do they conduct on the buyer when receiving an offer for your home?  How often do they touch bases with the buyer's agent and buyer's lender during the escrow process?  If you don't feel comfortable with the answers you receive either ask follow-up questions or keep interviewing agents.

By keeping a few simple things in mind when reviewing an offer, you have the best chances of completing the sale and moving into your next home.  You'll be so glad you did!

Brian Hoots
Real Living Speckman Realty, Inc. - Bourbonnais, IL
Andrea, welcome to active rain, enjoy the community here.
Nov 13, 2007 12:07 PM
Andrea Harlan
Keller Williams Realty - Thousand Oaks, CA
CDPE

A friend told me about this site so I figured I'd check it out. Thanks for the welcome!

Nov 13, 2007 12:26 PM
Keith Elliott Jr
KEIRE Realty Group - Manassas, VA
Principal Broker/Owner

Hi Andrea,

Welcome to Active Rain! The opportunities to learn and network are incredible here. Best of luck to ya!

-Keith

Nov 13, 2007 03:01 PM
Anonymous
Elizabeth jimenez

Andrea;

Great info!....

Always great to network!

take care

Liz

 

Oct 07, 2010 09:12 AM
#5