| Many of us subscribe to the Old West credo that a | | | | the structure. |
| deal is finished when both parties shake hands on it. | | | | Why would the sellers be so accommodating? It's not |
| If that's your way of thinking, then be prepared to | | | | that they want to. |
| get skinned alive when you buy real estate. The | | | | It's just that once a problem is revealed, it will have |
| modern credo is "Never stop negotiating"--even after | | | | to be dealt with one way or another, either with you |
| the deal is signed, even after escrow has opened, | | | | or with other buyers. It might as well be you,since |
| even after escrow has closed and title has passed to | | | | you're already involved in the deal. |
| you. If you truly want to look out for your own | | | | Further, seller sometimes simply get desperate to sell, |
| interests, you won't stop negotiating! | | | | Although they were adamantly against loweringtheir |
| Yes, this is a bit of an exaggeration. Nevertheless, | | | | price or giving you a better deal during the initial |
| those who do get the best deals in real estate are | | | | negotiations, now they simply lay down and roll over. |
| often those who keep right on negotiating as long | | | | I've seen it happen. |
| as, so to speak, there's anything left on the table. | | | | You may negotiate a cash settlement without |
| Negotiate as Part of Making an Offer | | | | actually having a disclosure problem corrected, |
| The entire process of making an offer involves | | | | provided the lender doesn't object. For example, the |
| negotiation. You purchase a home at a certain price | | | | seller s maylower the price $5,000 over a leaking |
| for specified terms, including contingencies thatallow | | | | roof. However, instead of replacing the roof, you |
| you to back out in certain circumstances. The sellers | | | | have it patched for $500 and pocket the difference |
| read you offer and then either accept or, more likely, | | | | (at least until the next rainstorm). |
| counter at a different price and withdifferent terms, | | | | Negotiate During Escrow |
| perhaps eliminating some of your contingencies and | | | | Some buyers with a lot of what might be called |
| modifying others by limiting them for example, in | | | | gallnegotiate right through escrow. As the sellers get |
| terms of time. Thus the sellers mayagree that you | | | | more and more used to the idea of their home being |
| can have an inspection, but you must approve the | | | | sold, the buyers keep coming up with new concerns |
| report within, say, 14 days. | | | | that can be resolved only by further concessions |
| Back and forth it goes with counteroffers, and | | | | from the sellers. |
| counters to the counteroffers and counters to the | | | | I've heard buyers say that they drove by and |
| counter to the counteroffers. This is the negotiation | | | | became aware that the window trim was damaged. |
| process and, depending on how good you are at it, | | | | They then wanted several hundred dollars off the |
| you'll get a better or worse deal. | | | | price to have it fixed. If not, they would simply hold |
| If you get a deal that's acceptable to you andis the | | | | off on buying the home. Yes, these buyers stand a |
| best you feel you can get, and if the same is true | | | | chance of losing their deposit (and more), but the |
| for the sellers, there's agreement and everyone signs. | | | | sellers won't get it either without going to court. In |
| The presumption is that the deal is made. | | | | the meantime, the sellers' house is tied up. It simply |
| Don't count on it. | | | | becomes easier for the sellers toacquiesce than to |
| Negotiate Over the Disclosures | | | | fight. |
| A wise buyer knows that the really tough | | | | In a very slow market, buyers may demand a |
| negotiations frequently don't start until after the deal | | | | reduction in price because of market conditions. They |
| is signed. Usually the next negotiation takes place | | | | simply tell the sellers that prices are going down. The |
| over the disclosures. Within a few days of signing,you | | | | house is no longer worth what is was when the |
| should receive a list of defects in the property as | | | | offer was accepted. Either the sellers accommodate |
| revealed by the sellers. | | | | with a lower price or the buyers refuse the deal. |
| (If you get the list before negotiation start, then this | | | | Once again, the sellers have options, none of them |
| point is moot.) | | | | particularly good in a down market. And many will |
| If your offer was properly filled out (or if your state | | | | acquiesce to placate an irritable buyer. |
| gives you rights here), you now can back out of the | | | | The sellers could refuse a buyer's new terms, then |
| deal without penalty. If something seriouslywrong is | | | | demand the deposit, or even demand specific |
| revealed, you may want to simply say no, take back | | | | performance (the buyer either goes through with the |
| your deposit, and move on. | | | | purchase or, more likely, pays damages). But few |
| Or you may want to negotiate some more. | | | | sellers really want to go to court and fewer actually |
| You do this by letting the sellers know (through their | | | | do. Buyer with gall and the willingness to risk a lot |
| agent, if they have one) that you disapprove of the | | | | have pulled off some amazing deals in this fashion. |
| disclosures because of the problem(s) they reveal. | | | | Negotiate After You Own the Property |
| However, you're willing to go throughwith the deal if | | | | It is possible to get a better deal even after the |
| the sellers either repair the problem or reduce the | | | | escrow has closed and you take possession of the |
| price. If it's price you want, you indicate what you | | | | property. This frequently happens when buyers |
| consider to be a fair price | | | | findsomething amiss, and demand that sellers make it |
| (sometimes a figure significantly lower than what was | | | | good. |
| originally agreed upon), and negotiations begin again. | | | | In one case, the buyers discovered after they |
| Typically the sellers will balk, but if they want to sell | | | | moved in that the sellers had allowed their pets torun |
| and there is a problem, they very likely will counter | | | | wild over much of the home. A urine smell |
| your offer. Back and forth it goes until both parties | | | | permeated the wall-to-wall carpeting in several rooms. |
| feel they can live with the same set of terms. If | | | | The smell had not been detected earlier because the |
| something significant was revealed in the disclosures | | | | windows were always open when the buyers |
| (or if you said that, in you view, what was revealed | | | | inspected the property. Further, the sellers had failed |
| was important), you may get a significant price | | | | to disclose this problem. |
| reduction or better terms. | | | | It's important to understand that animal urine in |
| Negotiate Over the Home Inspection | | | | carpeting cannot really be removed. The smell will |
| The next negotiation frequently occurs over the | | | | remain, often permeating the padding and even the |
| results of the home inspection. | | | | flooring beneath. |
| It's rare that a home inspection, even of a brand | | | | The buyers demanded that the sellers replace not |
| new home, will reveal nothing. Usually there's | | | | just the carpeting in the rooms with the problem, but |
| something, even if it's just leaking faucets. Depending | | | | also the carpeting throughout the house, since it was |
| on the severity of the problem(s) discovered, savvy | | | | all of a kind. They said it wouldn't look right to have |
| buyersnow open negotiations all over again. | | | | just a few rooms fixed. After conferring with their |
| How can you do this? Remember, a good inspection | | | | agent, the sellers agreed. |
| clause is actually a contingency that, in effect, makes | | | | Then the buyers picked out the carpeting, which was |
| the purchase subject to the buyer's approving the | | | | valued at close to $15,000, installed. The sellers |
| inspection report. You don't approve. There's no | | | | balked, but when confronted with the cost and |
| dealunless the seller is willing to come down in price | | | | possible outcome if the matter went to litigation, |
| or up in terms. | | | | they sent the buyers a check for that amount. |
| Keep in mind that problems such as these usually | | | | As long as there are problems, you can negotiate |
| arise two weeks or so after the deal was originally | | | | with the sellers. In some cases, even if the problem |
| signed. During those two weeks the sellers have | | | | is something you imagine, you can still negotiate and |
| begun making plans to move. They may even have | | | | win concessions simply because the sellers don't want |
| put down a deposit and made a deal on another | | | | to bother with the nuisance. |
| home. They are counting on your deal going through. | | | | Remember, to paraphrase Yogi Berra, the deal isn't |
| Now, suddenly, there's a hitch. As the buyer, you are | | | | over until it's over. |
| balking at something that came up in the inspection. | | | | Don't pressure sellers too far. If you insist on |
| You can bet that the sellers are going to be eager to | | | | unreasonable demands, they may simply refuse and |
| smooth over the problem, if they can. I've seen deals | | | | buckle down, ready to fight you legally. That |
| where the price was knocked down $3,500 to handle | | | | couldmean you'd lose the house and have legal |
| a problem with paint, $17,000 for a problem with a | | | | problems to boot. |
| roof, and $35,000 to accommodate a problem with | | | | |