Q & A: Negotiating and Closing a Good Deal

Click a question to jump right to the answer:

  1. Are interest rates negotiable?
  2. Are low-ball offers advisable?
  3. Do I need an attorney when I buy a house?
  4. How do I know what price to offer for a home?
  5. How is the listing price of a home decided on?
  6. Is there a secret to good negotiating?
  7. Should I include an inspection contingency in my offer?
  8. What are some tips on negotiation?
  9. What furnishings are included in the sale of a home?
  10. What is a contingency?
  11. What is the best time to buy?
  12. What is the difference between list price, sale price and appraised value?
  13. What is the first step to buying a home?
  14. What repairs should I make to my home prior to listing it on the market?

Are interest rates negotiable?

Some lenders will negotiate the interest rate on home loans, but this often depends on the buyer’s credit score and the number of points on the loan. Shop around with different lenders to find the best deal, and remember to pay attention to both the loan interest rate and the number of points.

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Are low-ball offers advisable?

A low-ball offer is an offer on a house for far less than the listing price. There are numerous reasons one may put a low-offer on a home, such as: the buyer feels the home is overpriced, the home has been on the market for a long time, the buyer thinks the sellers may be motivated, or the buyer simply wants to see if they could get it for that low of a price. It is advisable to first speak with your real estate agent to gain their recommendations prior to presenting a low-ball offer on a home. Though a low-ball offer could be accepted, presenting a low-ball offer may offend the seller to the point that they refuse to negotiate any further.

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Do I need an attorney when I buy a house?

Each state has different legal requirements for real estate transactions, and many require the use of an attorney for the closing process. Speak with your real estate agent to learn more about requirements in your area and for attorney recommendations.

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How do I know what price to offer for a home?

There are many factors to consider when placing an offer on a home, such as the current real estate market (is it a buyer’s or a seller’s market), comparable home sales in the neighborhood, and the condition of the home (move in-ready or fixer-upper). Other items that can impact the offer price are the contingencies of the offer – will you be asking for closing cost assistance, the inclusion of appliances, extended finance contingencies, or the sale of your home as a contingency? A seller may be more likely to accept an offer that is low in price and has no extra contingencies over a higher price offer that includes a contingency on the sale of the buyer’s home. For this reason, it is best to use an experienced real estate agent who can formulate an offer that not only includes all of your needs and wishes, but is also appealing to the seller.

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How is the listing price of a home decided on?

A new listing should be priced according to the current housing market. A real estate agent will perform a comparative market analysis (CMA) on your home, which estimates the value of your home based on recent sales of similar home your area. Using the CMA and their market experience, the real estate agent will price your home accordingly. Don’t hesitate to ask your real estate agent how they came to the listing price of your home and for examples of the homes they used as comparison in the area.

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Is there a secret to good negotiating?

One of the best assets to have during the negotiation of a home is a real estate agent. There are many factors to consider when negotiating the price of a home – the listing price, added contingencies, the proposed closing date, asking for seller assists, as well as the motivation of the seller and buyers, are just a few examples. A real estate agent uses their education and experience to formulate not only the best offer for their client, but also an offer that will attract the other party.

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Should I include an inspection contingency in my offer?

An inspection contingency is highly recommended for all purchase offers. A contingency is a stipulation added to a real estate contract that would make the contract null or void if the condition were or were not to occur. An inspection contingency allows the prospective buyer to hire a professional home inspector to asses the property for needed repairs or replacements. Based on the inspector’s findings, the buyer would have the ability to amend their original contract to include necessary repairs or even terminate their offer completely. Inspection contingencies are very common, and therefore widely expected and accepted by sellers.

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What are some tips on negotiation?

One of the best assets to have during the negotiation of a home is a real estate agent. There are many factors to consider when negotiating the price of a home – the listing price, added contingencies, the proposed closing date, asking for seller assists, as well as the motivation of the seller and buyers, are just a few examples. A real estate agent uses their education and experience to formulate not only the best offer for their client, but also an offer that will attract the other party.

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What furnishings are included in the sale of a home?

Generally, any fixtures that are permanently attached to the home are included in the sale. But, this is negotiable and therefore it should be specified in the contract prior to sale to avoid any confusion. Other non-permanent items can be negotiated as well, such as appliances, lawn equipment, and even furniture.

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What is a contingency?

A contingency is a stipulation added to a real estate contract that would make the contract null or void if the condition were or were not to occur. The addition of contingencies to an offer ensures that the buyer (or seller) is protected during the purchase process. A buyer or seller is able to add any contingency to their offer, but it must be agreed upon by the other party. Examples of common contingencies added to contracts are: financing, inspection, appraisal, and the sale of the buyer’s current home or property.

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What is the best time to buy?

The best time to purchase a home is dependent on both your personal life and financial status. Financially you should have enough money in savings to cover the down payment, closing and moving fees with ample savings left over to cover any miscellaneous or unexpected costs. In addition you should be at a stable point of life where you don’t see yourself moving in the next five or more years and you are ready for the responsibilities of homeownership.

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What is the difference between list price, sale price and appraised value?

The list price is how much the seller’s asked for when placing the home on the market, the sale price is how much the home actually sold for, and the appraised value is the worth a professional appraiser estimated for the home. Lenders often require an appraisal prior to closing to ensure the home’s value is not less than the loan amount.

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What is the first step to buying a home?

Before even starting their home search, buyers should review their finances and set a purchase budget. In doing so, buyers can also get pre-qualified for a loan to ensure they will qualify for a home within their desired price range.

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What repairs should I make to my home prior to listing it on the market?

Making repairs to your home before placing it on the market will help get top dollar for your listing. Items such as broken windows, holes in walls, scuffed paint, carpet stains, etc… can be especially advantageous to repair as buyers will focus on these small faults when viewing the home. Larger repairs, such as a new roof or new heating/air conditioning unit can also be advantageous, but should be carefully considered as they are a larger upfront investment. Speak with your listing agent to review what large repairs would be beneficial for your home.

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