Negotiations Tough In A Changing Market
(Buying a house is all about negotiating and reaching an agreement between the buyer and the seller.)
But negotiations become even harder in a changing housing market where everything is not set in stone.
We are experiencing a cooling housing market, where we see a surplus of homes on the market and falling prices. Traditionally, when this happens it is known as a buyer’s market, because they have the most leverage in the transaction.
During this time, negotiations become increasingly difficult because it seems as if the buyer and seller are in a gridlock – with neither party wanting to accommodate the other.
A September 25, 2006 article by Diane Hymer of Inman News, “What can home buyers expect sellers to fix,” discusses one of the most important negotiations in a home sale contract.
“Negotiating a purchase contract isn't easy when home sellers cling to expectations based on last year's real estate market, and buyers refuse to overpay. Equally challenging are the renegotiations that can occur after buyers do inspections.”
“How do you successfully navigate the second round of negotiations? The goal is to come away from the bargaining table feeling that you've struck a good deal, ideally without alienating the sellers. After all, you may need to impose on the sellers for return visits to the property before closing. And, you hope the sellers will leave the place clean and tidy.”
Before you even begin to think about negotiating anything, your best bet is to have a clear understanding of the purchase contract and what it means, so you can avoid looking uninformed about your potential purchase.
Much of the fine print about who is going to fix what will probably be found in the purchase agreement so it is best to look it over thoroughly before beginning any negotiations.
“Transactions can break down over differences of opinion about the extent of a problem and the appropriate remedy. It helps if both parties have open minds and a willingness to cooperate on reaching a mutually satisfactory solution. In many cases, a seller warranty is not a part of the contract. Instead, the buyer agrees to purchase the property in its present condition subject to inspections.”
There have been many cases where a sale has been voided due to small repairs that need to be made. And, depending on how the contract is written a buyer could have the opportunity to back out of a sale before any of the repairs are even made.
One of the major things that gets a lot of sellers very mad, and has been known to ruin sales is when buyers focus too much on the small details.
Although buying a home is one of the biggest purchases a person is probably going to ever make, it is important to think about the big picture, and not focus too much on the small stuff.
“Make sure you understand what happens if the sellers turn down your requests to repair defects, particularly if you don't want to lose the house. In a popular purchase contract used in California, the seller can't simply cancel the contract if he has a beef with the buyer. THE CLOSING: He must issue a 24-hour notice to give the buyer a chance to perform.”
