Getting the seller to say, “Yes!”

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It’s all about the deal, right? But what if the price is too high?

It’s been my experience that just like any other seller, bankers get the price wrong too. They just aren’t as fast to admit it. Be patient. If you find a bank owned property that you have to have, but not at their price, let it sit.

I’ve found that banks become more negotiable after 30 days of sitting on the market. The longer it’s on market, the more negotiable they are going to get. I’m definitely not afraid to write an offer below the listing price; which is why I advise my students to watch the properties. Here are 8 tips:

1. Write your offer on the standard purchase and sale agreement approved by the Board of Realtors and Department of Real Estate in your state.
2. Offer to pay the seller’s closing costs and their transfer taxes.
3. Take the property in an “as-is” condition but put an inspection contingency in the contract so if there are major repairs to be made and you decide not to purchase the property, you can cancel and get your deposit back or renegotiate the price with the seller based on the repair costs. “As is” means the seller is selling the property in the condition it is at the time you make the offer without any warranties.  However, each state has statutory disclosures that the seller must disclose to you about the condition of the property. The seller is obligated to repair or replace certain repair items with regard to safety issues.  Such items could be strapping of water heaters in earthquake prone areas, retrofitting toilets with low flow toilets and termite or pest control inspections.  Check with your realtor as to what those items are. They should also be disclosed in standard real estate purchase and sale contracts.
4. If you are paying all cash, then state that in the contract terms. Provide the seller with a copy of your bank statement or proof of the funds you will be using to purchase the property with your offer.
5. If you are obtaining financing, have a pre-approval letter from your lender to submit to the seller. This way the seller knows you will be able to secure financing and close the transaction.
6. Negotiate a loan contingency of at least 14 days to 30 days depending on the closing date.  This is the time period in which you have to secure your loan, obtain an appraisal, etc.  In today’s buyer’s market, I recommend including the loan contingency in your offer.
7. Offer to release the initial deposit or earnest money to the seller after all contingencies have been met.
8. If the seller is motivated because of job relocation, divorce or has purchased a replacement property, then negotiate a quick closing date of 30 days or less.

Over the years, I’ve taught my students negotiating techniques, always reminding them that good investing starts with mindset.  Today’s market place is challenging.  The market is flooded with foreclosed and short sale properties. Both sales are subject to the seller’s bank accepting the terms of the sale typically at a lower price than what is owed on the mortgage. In my experience, short sales are good investments because you are buying the property at or below market value; the seller and the bank avoid a foreclosure situation.

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