You're in a strong bargaining position (meaning, you look particularly welcome to a seller) if:
? You're an all-cash buyer; or
? You're already pre-approved for a mortgage; and
? You don't have a present house that has to be sold before you can afford to buy.
In those circumstances, you may be able to negotiate some discount from the listed price. On the other hand, in a "hot" seller's market, if the perfect house comes on the market, you may want to offer the list price (or more) to beat out other early offers.
It's very helpful to find out why the house is being sold and whether the seller is under pressure. Keep these considerations in mind:
? Every month a vacant house remains unsold represents considerable extra expense for the seller;
? If the sellers are divorcing, they may just want out quickly; and
? Estate sales often yield a bargain in return for a prompt deal.
Earnest Money: This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show "good faith." A REALTOR? usually holds the deposit, after a deal is made will turn it into the listing Company, the amount of which varies from community to community. However the more deposit, more stonger the buyer's offer will seem to seller. Usually one to three percent of the purchase price is customary. This will become part of your down payment.
The Seller's Response to Your Offer
You will have a binding contract if the seller, upon receiving your written offer, signs an acceptance, just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance.
If the offer is rejected, that's that, and the sellers could not later change their minds and hold you to it.
If the seller likes everything except the sale price, or the proposed closing date, or the basement pool table you want left with the property, you may receive a written counter-offer, with the changes the seller prefers. You are then free to accept or reject it or to even make your own counter-offer. For example, "We accept the counter-offer with the higher price, except that we still insist on having the pool table."
Each time either party makes any change in the terms, the other side is free to accept or reject it, or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side's proposal.
If you do want to revoke your offer, be sure to do so only after consulting a lawyer who is experienced in real estate matters. You don't want to lose your earnest money deposit, or find yourself being sued for damages the seller may have suffered by relying on your actions.
SELLERS, ITEMS TO CONSIDER
Calculating Your Net Proceeds
When an offer comes in, you can accept it exactly as it stands, refuse it (seldom a useful response), or make a counter-offer to the buyers, with the changes you want. In evaluating a purchase offer, you should estimate the amount of cash you'll walk away with when the transaction is complete.
For example, when you're presented with two offers at once, you may discover you're better off accepting the one with the lower sale price, if the other asks you to pay points to the buyer's lending institution.
Once you have a specific proposal before you, calculating net proceeds becomes simple. From the proposed purchase price you can subtract:
? Payoff amount on present mortgage;
? Any other liens (equity loan, judgments);
? Broker's commission;
? Legal costs of selling (attorney, escrow agent);
? Transfer taxes;
? Unpaid property taxes and water bills;
? If required by the contract: cost of survey, termite inspection, buyer's closing costs, repairs, etc.
Your present mortgage lender may maintain an escrow account into which you deposit money to be used for property tax bills and homeowners insurance premiums. In that case, remember that you will receive a refund of money left in that account, which will add to your proceeds.
When you receive a purchase offer from a would-be buyer, remember that unless you accept it exactly as it stands, unconditionally, the buyer will be free to walk away. Any change you make in a counter-offer puts you at risk of losing that chance to sell.
Who pays for what items is often determined by local custom. You can, however, arrive at any agreement you and the buyers want about who pays for:
? Termite inspection;
? Buyer's closing costs;
? Points to the buyer's lender;
? Buyer's broker;
? Repairs required by the lender; and
? Home Protection Policy.
TIP: You may feel some of these costs are none of your business, but many buyers, particularly first-timers, are short of cash. Helping them may be the best way to get your home sold.