Real estate is a game, partially determined by chance, and timing, but skill does play a part. Each party to the sale – both seller and buyer– want to get the best deal and either move out or in, happy and content in the transaction. This two-part look at the dynamics, techniques and attitude required to make the best deal, whether you are seller or buyer, should help.
Let’s start with timing. The buyer’s friend is supply. When there are lots of houses on the market, and few lookers, the qualified buyer is in the driver’s seat. He has lots of inventory to choose from and not much competition. The motivated seller is going to be very motivated to make an appealing deal.
You may have heard the term leverage. Another way to express leverage is to say “the upper hand”. Either the buyer or seller may have the upper hand in the transaction and several factors may come into play. A buyer may have leverage if he knows a particular seller must move quickly. Finding out the particular circumstances of the seller’s need to sell may really help a buyer take advantage of that information and get a better deal.
Price is first and foremost, but there are other things to consider. The terms and conditions of sale. As a buyer, you want the most flexible terms of sale, like mortgage, appraisal and inspection contingencies, and whatever concessions you can negotiate. These may include the seller paying part of the closing costs, making repairs or giving allowances for the buyer to make necessary repairs. The buyer’s ability to obtain concessions from the seller, however, is usually determined by the factors discussed above. If it’s a seller’s market, and especially if several buyers are vying for the property, some concessions may not be possible.
Now, to financing, a crucial element in real estate transactions. The buyer’s best bet is to go to a qualified lender and get a pre-approval letter. With this in hand, sellers will take you more seriously and you may move to the front of the pack if there are multiple offers. If you have all cash, all the better. Everyone loves cash.
Should you use a broker? The seller probably has, and it is to your advantage as a buyer, to have representation as well. Brokers have information about the general real estate marketplace and particular properties. They follow the trends and history of their neighborhoods. Knowledge, without doubt, is power. The more you know, you more you have to work with in choosing the best property and getting it for the best price and terms. You may think you can get a better price with only the seller’s broker to be paid, but this may not be the case.
So, to sum up, to get your best deal on a new house, you want to start looking when there are lots of houses on the market, probably fall or spring. You want to use the services of a buyer’s broker to find out all the information you can on the houses that interest you, their sales histories and seller profiles. You want to walk in with a pre-approval letter from a qualified lender, and of course, you want to present yourself as the lovely new person, couple or family who will inherit the property. It never hurts to make the seller like you and feel happy to bestow his house on you, for the right price, of course.
Happy hunting!
