Here I share with you some issues that have come up in my business which required my creative home purchase negotiation in order to get the terms or even the home my buyers wanted.
The house that was purchased in this transaction wasn’t even listed for sale. I tracked down the builder, showed them the county records, and got them to offer the house for sale. After going through multiple builder representatives, they finally agreed to offer it for sale at an outrageous price for the current market. The builder would not budge even after I sent them a market analysis showing them a more realistic expectation of value. At that point, my broker at the time told me to not waste my time. I couldn’t just give up there. This home was not like others on the market and it was upgraded more than most I’ve seen in our area. Besides, my buyer wanted it and I wanted to make it happen for her. I suggested to the buyer they may want to appraise the house and submit an offer with the appraisal since the builder was unrealistically priced an unwilling to reduce it. The builder wouldn’t agree to do a contract so, I asked the builder to allow us access to the home for an appraisal. I also suggested my buyer use the appraiser the builder’s recommended lender uses so they would have less to argue when it came in. Upon the buyer taking my advice and using an appraisal to convince the builder of the value, the builder still put up a fight but ended up giving in to the appraised value of which was approximately $160k less than what they were asking. This is a huge difference when you’re going from the $300ks to the $200ks. Sure, it was not the conventional way but, in my opinion, my creative home purchase negotiation was a colossal negotiating success.
My creative home purchase negotiationMy buyers see this home online. It’s in one of the only areas they are willing to buy in due to it being walking distance to the buyer’s preferred shopping. We go to view the home and upon opening the door, we are welcomed with a not so pleasant smell. I spoke with the agent about why she thinks it’s not selling since the price was at the low end of the market value. She said the feedback she’s been getting from other potential buyers is that it will cost too much to remediate the odor. My buyer did some online research and wanted to walk away from it as well because he found it could cost a few thousand dollars up to $10,000. He also thought he could offer $10,000 less. That didn’t work. In my experience, I did not think the online estimate was accurate. After getting the buyer to agree, I had the agent get the seller to agree to allow us to send for a quote on the remediation prior to writing an offer. Here’s the quote:
816 sq. ft. clean tile and grout floors & seal grout $489 for a grand total of $839.
Knowing The Home Won’t Appraise
After my buyer had been looking at homes for quite some time, he began to know what homes should be going for. He also had me giving him comparable properties, “Comps”, that had sold recently. We knew there was no way the house would appraise. Should it not appraise, the buyer would either have to pay the difference between the appraised value and the contracted amount, convince the seller to accept the appraised value or cancel the contract and not get a refund of the money spent on the appraisal and home inspection. My creative home purchase negotiation strategy was to ask the confident seller to pay for the appraisal to done immediately prior to the inspection period beginning. My buyer was willing to pay the higher amount if it appraised. Unfortunately, the appraisal came in low and the buyer and seller could not come to a compromise so, the deal fell through. Good news is that since I was able to foresee this possibility, I limited my buyer’s risk and saved him the expenses he would have had if he had proceeded in the standard way of doing the home inspection prior to the appraisal.
Property Is Not For Sale… Are You Sure About That?
So, just because you see a property, land or housing, that is not listed for sale does not mean the owner won’t sell it to you. I have sold a few properties that were not on the market to be sold. I already mentioned the one from the builder above. There was also land adjacent to my clients home that I contacted the owner of and turned out they were wanting to sell. Another client of mine owned a home that I knew they were thinking about selling some time soon but just didn’t know when. When I found the perfect buyer for it, I called them up and asked if now would be the right time and it worked out beautifully for all parties. I have also been known to call expired listings to see if they are still interested in selling. Although I have not yet sold one like that, an expired listing may just be the right one for my buyers so, I don’t count them out.
I look forward to working with you soon and handing you the keys to your new home.