Having a smooth transaction from offer to closing is not always the rule. There are usually counter offers from the sellers and negotiations back and forth between sellers and buyers.
If the seller rejects the offer and sends you a counter offer, it is up to you to accept the new price and/or terms or to walk away from the transaction.
If you decide to negotiate, your agent should use his/her negotiating skills to get you the best offer.
These are some rules buyers should know before they and their agent starts negotiating.
1. Act as soon as possible
When you receive the counteroffer, you should act as soon as possible. The seller might get a better offer or might decide to withdraw the offer before you respond.
2. Raise your price
If you initially placed a low offer, you might want to increase the offering price. Your agent should be able to guide you with the prices at which similar properties have been sold in the area. It is important to keep in mind not to exceed the pre-approved mortgage that you have received and you should not go over your budget.
3. Understand the needs of the Seller
If the seller needs to stay longer in the property, try to set a longer close date. Or even do a rent-back agreement, where you will be renting the property to the seller after the closing date.
4. Have fewer contingencies.
Reduce the number of contingencies such as shortening the inspection time, use an As-Is contract where you can still walk away from the deal before the inspection date-line, but remember that the seller is not required to fix anything. But be selective, for example removing inspections might not be a wise idea.
5. Remove some concessions from your offer
When making the offer the buyer has the option to ask the seller for some concessions, for example contributing with title policy and closing costs. These lower the seller's net proceeds from the sale. When making the counter offer and removing some of those concessions allowing the seller to put more money in his pocket, will make the offer stronger giving you a better chance to be accepted by the seller.
6. Know When to Walk away
Not always negotiation goes the way you want. Know when to stop giving concessions and trade-offs. If the seller does not come to terms where you feel comfortable, this might not be the property for you.
About the author: Beatriz Rocha is a real estate professional affiliated with Coldwell Banker www.bearocha.com