Archive for January, 2009

The art of negotiation is the procedure of communicating back and forth in order to come to a mutual agreement. Negotiation is done when two parties have different expectations and must come to a mutual agreement before a contract can be signed. The most experienced negotiators will bring an attitude of high expectations to the negotiation table. They work hard to solve the problems and are easy on the people. It’s more effective to remain cooperative and efficient in order to preserve a civil relationship between the buyer and the seller, so they can work together to solve any problems and to complete the transaction as painlessly as possible.

When negotiating a contract over buying a home you want to get the lowest possible price and close on the house within a reasonable amount of time so you can move in.

1. Let the seller know what you need or expect in a clear and reasonable manner. Sometimes a buyer may submit a letter to a seller depicting why the property is not worth the asking price and pointing out the faults. This is a sure way to start the negotiations off with a defensive seller. It would be best to anchor a reasonable price, while continuing to remain polite and respectful of the sellers’ home.

2. Be prepared to solve any repair, title, survey or loan problems fairly; so there are no future problems to be addressed at closing.

3. Never respond to offers emotionally. This combative style of negotiating can turn the seller angry or defensive and can escalate into negative comments, table pounding and threats to walk out on the offer.

4. Keep your cool. Never argue. Arguing can sometimes make the seller want to work against you instead of working with you.

5. Do not be too quick to respond. Do not ignore or respond to the sellers’ arguments or statements immediately. Make it known that you are listening carefully and considerately, but do not reject or accept any offers until you have had time to carefully consider them.

6. Have any unclear portions of the proposals clarified completely.

7. Never discuss personal issues that involve the seller or buyer, such as an urgency to move in or a financial status.

8. Let trust increase the buyers leverage by: listening and understanding what the seller has to say; convey an appreciation or admiration for the sellers home decorating and gardens; and respond to counter offers within a reasonable time frame.

9. Find a common ground with the seller. This can be a very powerful tool used to the buyers’ advantage in the event of multiple offers. Sometimes a seller may select a buyers’ contract for personal reasons, like if the buyers’ family reminded the sellers of themselves when they bought a home with their young children, or just by sharing the same religion.

10. Understanding your leverage as the buyer. The more the buyer can find out about the seller’s needs, the better chance the buyer has to find solutions in negotiation. The buyer must be able to appeal to the seller’s concerns. For instance, if the house has been on the market for over 300 days, the seller will have a lot more leverage than they would have with a brand new listing. If the sellers time frame is forthcoming, then the buyer can meet it with some leverage, unless the seller’s have multiple offers.

Most buyers usually offer less than the listed price of the house. So, how much under the listed price should you offer? That all depends if the house is listed in a strong seller’s market and the market analyses of the recent sales in the neighborhood from where the house is being sold. The buyer should do their homework before submitting an offer so low, they might risk offending the seller and have their offer rejected immediately.

If there are multiple offers on one property, disclosure is favored among all parties. However, the seller or agent representing them will make the final decision as to how the offers will be handled. The seller may disclose the terms of one offer to stimulate another buyer to submit a better offer. Normally the procedure for multiple offers is to notify each party of the multiple offers that have been received. Each of the parties is then given an opportunity to amend their offer and submit it within a certain amount of time. After all offers are on the table, the seller is once again free to review the amended offers and select a buyer to negotiate with. Sellers are in no way obligated to accept the first offer that comes in. Any offer selected may be countered, negotiated, or accepted as is.

There are many things a home owner can do to increase the value of their home. This can be done on the interior or the exterior of the home, from do-it-yourself for the smaller projects to hiring a contractor for the larger jobs. You can give your home a face lift a little at a time. Most home owners don’t have the finances for a complete over haul done all at once. To most people, their home is their largest investment and they would like to keep it in prime condition. Although the price of your home is mostly determined by the current market conditions, there are several things you can do to maximize your homes value.

1. Decorative moldings can be used throughout the home for interior to exterior, to trim doors, floors, walls, windows, fire places and ceilings. These moldings can be found at practically all home improvement stores and are fairly easy to install to enhance the look of any room.

2. Kitchens tend to be the greatest investment that many potential buyers look at the most. Replacing cabinets and counter tops, can be done gradually at your own discretion or you may choose a more creative way to improve the old ones by painting the cabinets and replacing the knobs or handles.

3. Vinyl windows are a great way to increase the value of any house. These windows function better than the old wooden windows by opening for easy cleaning and they conserve more energy in the months when heat or central air will be used the most. They do not require painting and they can really make a house look beautiful.

4. Adding a new roof can make a very strong impression. The roof is the first thing people see and this can play a strong role in how much your house will sell for. A new sturdy roof provides protection from leaks that make ugly stains on the ceilings in your house that can lead to more damage.

5. Installing vinyl siding, if you don’t already have it, this can add up to $10,000 to the value of your house. If you have fairly decent vinyl siding already, you can hire a power washing company to clean the siding and give your house a fresh new look.

6. Painting the interior or exterior of a house can transform a house completely with a few coats of paint. You can be as colorful and creative as you like and you can take your time doing so, one room at a time.

7. Flooring absolutely makes the difference in any room. Whether you use linoleum, tiles, wood or carpet, a new floor can make all the difference.

8. Adding new appliances such as a refrigerator, stove, dishwasher, washer and dryer can greatly improve the value of your home. Along with adding a new water heater, furnace and central air unit.

9. Exterior landscaping can enhance a homes value by keeping a well maintained yard to adding strategically placed flowers and shrubs. You can also plant an attractive garden or install a small fish pond. Deciding to install or replace a fence along your property line will also be a great attraction to potential buyers, especially the ones who have children.

10. Adding a new deck is a great asset to the exterior look of your home. These can be made from a variety of wood and sealed to preserve the natural appearance. A new deck will provide the outside recreational area to grill out, while relaxing in a comfortable patio set and enjoying the great outdoors and fresh air.

Adding value to your home can be as simple and as affordable as you want it to be. Most improvements can be accomplished a little at a time, all depending on your time and budget. Smaller improvements can be made by simply adding potted plants along the stairs up to your freshly painted front door or by adding a small table or work of art in your foyer.

A visit to the home improvement store or looking through magazines can spark creativity when remodeling your home. Even if you have no idea where to start, one spark can lead to another and another, until before you know it, you have created a beautiful home that you may never want to leave.

Step One
You must know what your wants and needs are before embarking on the long journey of house hunting. Taking a piece of paper, sit down and write down all the features that are most important to you:

Are you looking for a house in a specific city, neighborhood or school district?

How many bedrooms and bathrooms do you want or need?

Do you want off street parking, or a one or two car garage?

If you operate a home based business, are there any restrictions in the area you intend to buy in?

Do you want a finished basement or attic space?

Do you want a ranch style home or two story house?

Do you want a central air unit?

Do your want a furnace or a boiler for heat?

Now, on a separate piece of paper, write down all the features that you absolutely do not want in a house:

Living in a congested part of town.

Living next to an airport, train station or highway.

A home that is in great need of repair.

A home with too many stairs.

Keep this list in mind as you look at houses. This list may also change from time to time as you look at houses. You may choose to add or remove certain features you do not want or are willing to make compromises on. Don’t be disappointed if you can not find the “perfect” home. Most homes do not come “perfect,” they can only be made that way through time and patience.

Step Two
Before you begin looking at properties, you will need to get your finances in order. This will be a good time to review your credit report and possibly clean it up a bit to improve your credit score. It’s important to check your credit report to make sure there are no discrepancies. Any past due amounts should be paid in full or most companies will be willing to negotiate a settlement price to close the debt.

For example: If you have a past due credit card debt you no longer use and that has been entered into collections at an amount of $900. You may be able to offer the company a settlement of $500 to settle that debt and have the debt stricken from your records. Before paying this settlement, have this agreement in writing. Be sure to keep all of the receipts to the items you settle on your credit report because it may take weeks or even months for the settled debt to be removed from your credit report.

Step Three
Now decide what kind of property you are interested in buying. Are you interested in a foreclosure, real estate or for sale by owner property? There are many web sites on line where you can find homes by city, or price range. On these sites, you can see the picture of the home, many with virtual tours, and review the listing features and details.

Step Four
Now is the time to find a lender and get pre-approved for the loan. This will give you a better understanding of what price range you can look into. Being pre-approved also serves a great advantage for when you find the home that you want, so that you can move ahead and place an offer on the house without having to wait on a pre-approval while someone else steps in and takes the house right from under you.

Lenders may offer special programs on loans that can save you extra money in the closing process. Before deciding on a loan, ask the lender about any of these special programs and what would work to your advantage.

Step Five
Most first time home buyers prefer to work closely with a reputable real estate agent, regardless of the type of property you wish to buy. Real estate agents are very knowledgeable and can give you many helpful tips and information that can benefit you. They are also great negotiators and will help explain the complicated paperwork involved when placing an offer on the house or when closing a deal. Be certain that your real estate agent is working for you as the buyer and not for the seller of the house you would like to purchase. This can lead to a conflict of interests and cause many problems.

Choosing a real estate agent to work with should take more than picking a number out of the phone book. Talk to your friends and neighbors and ask them for any recommendations. You should only work with an agent you feel comfortable with.

The process of selling your home can differ from state to state. Before putting your house on the market, there are some important steps you must take to get the most from your investment and to protect your interests.

Step One
Get pre-approved to buy another house before you sign a contract to sell your own home. If your financial situation changed since your last purchase, it’s possible that you may no longer qualify for another loan. You may also be unable to sell your house for a price that will allow you to buy another house you want. This way, you won’t end up renting or buying a house you don’t really want. When applying for a pre-approval, be sure the lender discloses the estimated costs required for you to purchase a new home, such as: the loan price, down payment, new insurance, title and inspections fees.

Step Two
Call your lender to check the mortgage pay off and calculate the estimated proceeds. First, you will need to subtract the mortgage pay off from the fair market value of your home. Second, you will need to subtract the costs to sell your home from the remainder in order to get an idea of the proceeds you can expect to be paid at closing.

Step Three
Determine your homes fair market value. Most real estate agents will gladly help you determine the market value as a courtesy and may also give you helpful hints to what you can do to increase the value of your house. You may also consider hiring a licensed appraiser, which you will have to pay for out of pocket, to perform an appraisal on the subject property.

Professional appraisers will provide you with a detailed report that will usually include: the neighboring property values in comparison to your own, an evaluation of the real estate market in your area, harmful issues to the property’s value and any defective qualities.

Step Four
Estimate what it will cost you to sell your house. If you are using a real estate agent, you may have to pay their commission. If you are planning to sell by owner, then you must consider the advertising, signs, attorney fees, closing agents and other possible fees involved. These other fees may include: appraisal, inspections, surveys, taxes and home owner association fees. Real estate agents can give you a more precise estimate of the closing costs and any other fees that may be involved. Real estate agents are professionals that deal with these transactions every day and can prove to be a valuable asset to you.

Step Five
Make repairs. Whether these repairs can be done by you or by hiring a contractor, they should be completed. If there are too many repairs that need to be done, your home will be considered a fixer upper. You want to get the most out of your house and dissuade potential buyers from submitting insultingly low offers. These repairs can range from fixing a broken window, adding a fresh coat of paint, replacing or repairing the flooring, to spackling a hole in the wall. The larger repairs may include fixing a damaged roof or repairing damaged siding. Other issues that can deter a potential buyer is mold and mildew stains and odors, leaky basements, lead based paint, broken gutters, location or type of circuit breaker, plumbing problems and old or faulty electrical wiring.

Step Six
Before you show your house, do some spring cleaning, regardless of what season it actually is. Organize your shelves and closets, wash the crayons off the wall, dust off the blinds and window sills, clean away the cob webs and wash all windows and appliances. You will want to make everything as spotless as possible and remove any offensive odors and clear the clutter. You will need to present your home in a clean and appealing way to the potential buyers.

You may also need to work on the exterior part of the house by scraping and painting porches and windows or maintaining an appealing lawn. You can also add low maintenance decorative flowering plants and shrubs to dress up your yard.

Now that your home is ready to show, make it accessible to real estate agents with potential buyers at all times. Most buyers feel more comfortable being shown a house when the owner is not present. If you decide to take a walk while your house is being showed, make a note to the agent if there are any pets on the premises. You will want to be sure that your cat doesn’t get out the door or that your dog is securely locked up in a crate or in the back yard. You want everything to go as smoothly as possible.