On to the final part of this three part blog entry…
8. Not Negotiating Hard Enough on Price
Obviously your ability to negotiate the best price on a property will vary depending on your current market’s conditions. A buyer’s market means that there is more supply than demand and therefore buyers have the upper hand. A seller’s market is just the reverse.
Regardless of the market, however, you can usually negotiate a better price if you will follow the steps previously stated. These steps will give you the information and positioning necessary to approach the negotiation process fully prepared. You should also be careful when offering a certain price and terms for the property not to give any indication that you will go higher. This is the time when a poker face is extremely useful and keeping your excitement in check is critical. Just remember that every rand you save on price will save you 2 ½ to 3 times that amount in mortgage payments.
9. Not Negotiating For Extras
This is another opportunity that is often lost during the negotiation process. That is the opportunity to save money on items you will need to buy if you don’t have them (such as a refrigerator, lawn mower, etc.) or to get goodies you would not normally buy (such as a hot tub or sauna). Many of these items can be had simply for the asking.
Many home sellers don’t want to take the time and effort to have to move the larger items and often they are looking for an excuse to buy something new. Whether they are or not, it can’t hurt to ask. These types of items make good bargaining chips and the worst they can do is say no.
10. Not Following Up On Contract Stipulations
When negotiating the purchase of a property there will often be items (such as repairs, etc.) that the seller agrees to take care of prior to closing. It is a mistake to simply assume these have been taken care of and not check on them prior to closing.
Make sure to do a final walk-through of the property well before the closing date. Bring along a list of all the items that were agreed to and check them off as you go. It’s not a bad idea during the negotiation process to agree to an amount to be held in escrow at closing if the items are not taken care of. This will give the Seller motivation to make sure they are completed and will avoid delays in closing if they are not.
11. Hidden Expenses
It’s no fun to get to the closing table and find out that the costs of completing the transaction are higher then you thought. If inspectors, surveyors, etc. have agreed to be paid at closing make sure you know what their charges will be and get it in writing. The same is true of your lender. Your lender should be able to provide a detailed estimate in writing of all expenses to expect in originating your new loan. Be sure and bring these items to closing and compare them. No lender can be exact down to the penny in estimating these costs but a good lender should be pretty close.
12. Rushing The Closing or The Escrow Period
Nobody likes surprises when it comes time to close. Moving is one of the most stressful times in peoples lives so both the Seller and you as the Buyer are going to be more emotionally “uptight” then normal. The best way to minimize the stress is to expect some bumps along the way and give yourself time to deal with these challenges as they appear. Make sure to set reasonable time frames for items to be accomplished then hold to your schedule as much as possible. Ask your lender to have all the documents available for review a day prior to closing. Check them out carefully to make sure the costs on the settlement statement are in line with what you expected and that the terms of the loan (i.e. interest rate, fixed or variable, term, prepayment penalties, etc.) are what you agreed to. This way if you do find a discrepancy you will be able to deal with it without feeling under the gun and there will be time to fix it before it becomes a problem.
So, what to do next?
Well, I know that is a lot for you to take in so I am happy to spend some time with you and answer any questions you have about the process of buying your new home. You are welcome to call my office at 086 110 6204 during business hours. Or visit this website for more information
Or, of course, you can do nothing, throw this letter away and continue paying rent wondering what it would be like to own the house you’ve always wanted and watching the price of homes continue to rise. Instead, if it’s time to make a change in your life, let me help you avoid the possible pitfalls and make smooth transition into your new home.