Six Biggest Real Estate Negotiating Blunders Made By Buyers
According to the 2011 National Association of Realtors® Profile of Home Buyers and Sellers, the second most popular reason buyers use a real estate agent is to help with the negotiation process. However, buyers can negatively impact the process and make mistakes which can cause them to lose their dream home. Don’t make these negotiation blunders:
1. Not having a negotiating strategy: Before submitting an offer, try to remember that the seller has already decided how much money they want from the sale of their property. Knowing how to negotiate effectively is the key to getting the best deal. Without a plan, you might risk losing the house you want. Know your “bottom line” before you begin to negotiate
2. Giving up too soon: Buyers might get discouraged when they are competing against multiple offers on a house. However, the biggest mistake a buyer an make is to panic and withdraw their offer. You should stay involved for at least one round of negotiations. Price is not the only consideration for the seller.
3. Not providing earnest money: Earnest money is a cash deposit you make when submitting your written offer on a property to show your “good faith.” Sellers are understandably suspicious of offers that are not accompanied by such a deposit. The higher the earnest money deposit, the stronger your offer will be. If your offer is not accepted, your earnest money will be returned to you.
4. Having too many contingencies: A contingency is a term or condition that must be met for an offer to become a binding contract. Home buyers with too many contingencies tend to weaken an offer. Some examples of contingencies are securing a job transfer, selling your current home or obtaining specific financing terms.
5. Weak negotiating position: Sellers are looking for the best offer considering price, contingencies and the financial position of the buyer. For your offer to be accepted, you need to be pre-approved for a mortgage, make a competitive offer and have few or no contingencies. With these factors in your favor, your offer could be accepted even if your price was higher than a buyer who was not pre-approved or who had a long list of contingencies. Be aware that in a ‘hot’ seller’s market, you may need to offer the list price (or more) to beat other offers. Ask your real estate agent for advice as he/she will know the state of the local market.
6.Asking the listing agent to negotiate for you: by law in Connecticut, the listing agent has a fiduciary (legal) responsibility to the seller – not you the buyer. The listing agent will always seek the best offer for the seller. As a buyer, you need your own buyer’s agent. A buyers agent has a fiduciary (legal) responsibility to you, the buyer and will negotiate on your behalf to help you get the lowest price with the best terms. An Accredited Buyer’s Representative can counsel you on making an effective offer that will land you the house of your dreams. Dale Athanas (the author of this article) is one of more than 40,000 members of the Real Estate Buyer’s Agent Council (REBAC) of the NATIONAL ASSOCIATION OF REALTORS®, who have attained the Accredited Buyer’s Representative (ABR®) designation. The Accredited Buyer’s Representative (ABR®) designation is designed for real estate buyer agents who focus on working directly with buyer-clients. Having an ABR® can guide you through structuring your offer and negotiation strategy.
As both an Accredited Buyers Representative and a Mortgage Loan Officer, I can help you get pre-approved for a mortgage, find your dream home, negotiate the best price and terms and process your mortgage. I will be your sole contact throughout the buying process and will be at your closing as both your real estate agent and your loan officer.
Give us a call for a free consultation at 860-788-7237.
John Vecchitto / Loan Officer
210 S. Main St. First Floor
Middletown, CT 06457
860-788-7237 (Office Phone)
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