When negotiating real estate sales, price is very important, but so are terms and conditions. Just because you can “net” the best price, doesn’t necessarily mean you have the best net outcome. Knowing How To Get the Best Price & Terms in a Real Estate Sale is key to a successful outcome. Ask your agent if they understand what that means.
Some buyers don’t have all the necessary funds to pay for their down payment AND their closing costs, also known as concessions. It’s not uncommon for buyers to ask sellers for assistance, seller concessions, in paying for the closing costs by using the net proceeds as funds for that purpose. If a buyer is asking for seller concessions then know that paying those costs is a reduction in net proceeds to a seller.
The time it takes to sell a home is another aspect that will affect the net result to both parties. If a longer closing period is requested, those terms might add extra interest and prorated fees to a sale, thereby reducing net proceeds and added expense for the seller.
Sometimes discounted fees are available if using the same title company to process the closing due to a previous transaction in the last 6 months by the buyer or seller. Selecting the same title company again provides an opportunity to save money, check with your title company to be certain. The savings can be a few hundred dollars so check to see if this option is available for either buyer or seller. Knowing this little trick can save a few dollars as to How to Get the Best Price & Terms in a Real Estate Sale.
If the contract is higher than the last sale, does the buyer have sufficient funds to cover the difference in appraisal price versus purchase price, in case the home does not appraise? A lender will only lend money on the appraised value of the home, regardless of what the agents or buyer and seller think the home is worth.
What if during the contract process, the seller won’t reduce their sales price? If the buyer agrees to pay the higher purchase price, is the buyer maximizing the amount they are approved to borrow by raising their purchase price? A new pre-qualification form needs to be issued with the higher loan and purchase price coinciding with the contract by the lender. Understand that staying on top of what a buyer is qualified for helps you to Get the Best Price Terms in a Real Estate Sale.
Make sure the buyer is pre-approved versus pre-qualified. The difference means that that the buyer has submitted all of their financial data necessary to be pre-approved and is ready to commit to financing a home. That difference will save you time in working with a buyer who is not ready to pull the trigger on a home and may cost you more time on the market, only to learn that they aren't ready to close a sale.
Is the maximum mortgage payment amount listed on a pre-qualification form more than the estimated mortgage payment of the higher purchase price? Check the math with a mortgage calculator to be sure the buyer can afford the higher purchase price.
A lender will lock a rate at a certain point in a contract period. If a rate lock has been put in place and the time to close has been extended, this might negatively affect a buyer due to fees applied when a rate lock expires. Does the buyer have the funds to pay for a rate lock extension? It may only be a few hundred dollars but might stymie your sale! Know How to Get the Best Price & Terms in a Real Estate Sale and it could save you time and money.
Contacting a buyer’s lender to inquire about the above scenarios is a good idea as a listing agent representing the seller. With this information in hand, a seller can be more confident in proceeding in assisting the seller to gain the best results from a buyer who is requesting closing cost assistance.
If the home hasn’t been listed for sale for very long, and a contract that includes a request for closing cost assistance is received, it’s only natural for a seller to be thinking they may miss out on a better offer by accepting this type of offer. That’s a natural response when selling a home and especially if you’re a first time home seller.
It’s always a good idea to factor in every aspect of a purchase and sale of a home to arrive at the best net outcome. With these items in mind, the best result can be achieved for both the buyer and the seller. Know How to Get the Best Price & Terms in a Real Estate Sale for the best outcome.
If you’re thinking of buying or selling real estate in the Phoenix Metro Area, give me a call. I’m happy to meet with you for a first consultation meeting to discover what’s important to you in the purchase or sale in residential real estate.