Negotiations with Home Purchase

[Coach1310]

We are currently considering an offer on a house that we really like. I just have a couple of questions.... What % of transactions include the SELLER paying all/some of the closing costs? Do you EVER consider a full price offer right away? We have been told they are expecting another offer, do we believe them or is this part of the game? What is the best way to look at it.... what you are willing to pay OR what comparables are going for?

Our first house we bought from the owner the first day it was for sale. This one is owned by a company who renovates homes for a living and they have their own company real estate agent if it matters.....

Any advice/help appreciated!

[daylate$short]

How long has the house been on the market?

[Coach1310]

Not very long.... a few weeks

[CJH]

They may be waiting for another offer, and they may be using that as leverage against you. We bought our house from a bank (new const foreclosure) this spring and they said the same thing. We made an offer, but sure as heck didn't pay full price, even after going back and forth during negotiations, plus got a ton of stuff thrown in. Personally, unless it was my absolute dream house, I would never make a full price offer. Especially in this economy......remember money talks and [PoorWordUsage] walks. So a good offer in their hand will get their attention and it doesn't have to be full price.

Definitely look at comps and know what it should go for, not what they are asking for. Be willing to walk away if the deal's not right for you.

Also, have all of your ducks in a row (pre-approved mortgage, etc...)

You can negotiate in closing costs, but I'd rather get the house cheaper and have a smaller mortgage, but it depends on your financial situation. Not everybody does it or is willing to do it. Just depends on the situation.

Sorry to ramble a little bit, hope this helps.

Good Luck!

CJH

[Coach1310]

I hear where you are coming from. I wouldn't consider it if I didn't feel it was a good deal. I think if we paid full price and without another collapse in the housing market we could make some $$$ in the very near future. I also worry about losing out to a first time homebuyer with the timeline for the credit running short and them knowing they have $8K in their pocket. I understand the not offering full price and I don't think we will, but if we had to pay full price I would absolutely consider us lucky to get the home for that price.

[echo2010]

I offered almost 10% below asking... I paid my own closing costs and asked her for 1/2 the radon mitigation and to not smoke inside the home.

it was agreed on right away.

When I took my mother to look at a house, she fell in love with it right away, knew there was 2 other offers already made that day (House was very well priced) so since she had the money and really wanted it, she offered $500 over asking. In this small of a town that isnt hear of often and let the owners have a 90 closing since they were expecting house to take a little longer to sell.

[8-Ball]

My rule of thumb with the four homes we have bought has always been that the seller pays closing costs. We have stood firm in this and each seller paid the closing costs. If they did not agree to this, the offer is/was off the table. Thats what we have always done. If they want to sell it bad enough, they will agree to pay closing costs.. Good luck.

[Bjjams]

My friend's been looking for a house. He found one he liked but the realtor said there was another interested party so he put in a full price offer on it. He didn't get it. This is a crazy market. Any sort of good deal is going quickly. Everyone wants that $8,000 from the government.

[OnAFly]

This market, seller pays closing costs. This is what our realtor told us when we were looking to buy. Keep in mind that these costs are about $8-9K for a $200K house, so when you make any offer you are offering $8-9K under what they want off the bat.

[Bear55]

Just remember this is a buyers market, they need you more than you need them. Get your own realtor if you haven't already, don't trust their realtor for obvious reasons.

[BobT]

We are currently considering an offer on a house that we really like. I just have a couple of questions.... What % of transactions include the SELLER paying all/some of the closing costs? Do you EVER consider a full price offer right away? We have been told they are expecting another offer, do we believe them or is this part of the game? What is the best way to look at it.... what you are willing to pay OR what comparables are going for?

Our first house we bought from the owner the first day it was for sale. This one is owned by a company who renovates homes for a living and they have their own company real estate agent if it matters.....

Any advice/help appreciated!

I look at it this way.

It doesn’t matter what other people “typically” do. Whether the seller or buyer pays closing cost is not an issue. The bottom line is you are buying and it’s up to you how much you are willing to pay.

Are you going to pay the cost to bring the abstract up to date or are you not willing to agree to the sale until the seller gets it up to date?

Are you going to pay all the taxes for the year, is the seller going to pay all the taxes for the year, or are you going to agree to pro-rate the taxes to the closing date?

Are you going to pay the cost to record the sale or will you agree to buy the house only if the seller pays that cost?

Notice that in all three of these questions, and any others you may have, come with the same common denominator….the word “agree.” That’s what it comes down to. I might agree to cover closing costs if the seller agrees to a lower price. I might agree to the seller’s price if the seller agrees to split the costs or….

The point is, it’s an agreement and whatever you decide, make absolutely certain that you have it in writing.

[luckey]

Bingo, BobT nailed it. It is exactly what you and the seller agree to. You cannot MAKE him do anything and he cannot MAKE you do anything, without you both in agreement. Just make sure it's all documented in the purchase agreement. Heck, the last house I sold the buyers wanted me to leave a couple old rotted wiskey barrols. I agreed.

As to "we have another offer so make yours a good one", thats anyones guess.

[Coach1310]

Thanks for all the replies and info. We have agreed to terms pending inspection and appraisal. We met in the middle and I think both parties are happy with the final result. To be honest, I don't wish this negotiating [PoorWordUsage] on anyone!!! I hate it! Thanks again for the all the help

[luckey]

Congrats on the home purchase. Now the bad news is your negotiating may not be finished just yet. If the inspection turns up stuff, you my be inclined to ask the seller to fix the issues or compensate you for the expected repairs. From my experience, most sellers will compensate you, or fix inspection issues. Don't nit pick (loose door knob, bad outlet etc) but don't be afraid to ask them to replace broken windows, leaky facwets, or a bad roof. Good luck.

[nofishfisherman]

I'd be more inclined to have them compensate me for the repairs and then do them myself. If you ask them to do the repairs you know they will do them as cheaply as possible, you'll likely end up with inferior products that won't last over time and will likely need to be replaced again.

Figure out what the items will cost you to do them the right way and the ask for compensation. Its more work for you but you'll know all the work was done right and not on the cheap.

[WingDing2]

There is a limit to how much the seller pays for in closing costs

just be aware of that. 3% of the sale price if my memory serves me right.

[BobT]

Is this some kind of law? I've never heard of this but if so, it could easily be overcome by a higher sale price. It still comes down to the bottom line on the purchase agreement. Party A is ready to sell and party B is ready to buy. What they finally agree to is between them.

[nofishfisherman]

I thought 3% was just a standard amount but not a cap, I could be wrong though. Usually 3% should come real close to covering everything if not cover it entirely. Usually it just depends on when you close and how much tax the buyer is responsible for.