EVERYTHING IN REAL ESTATE IS NEGOTIABLE

Everything — absolutely everything in Real Estate — is negotiable.

Recent economic reports indicate that real estate sales are on the increase, especially since mortage interest ratesare still very low. But it still is a “buyer’s market“.

Home buyers, and especially first timers, do not understand that they have the right to bargain and negotiate all aspects of their real estate purchase.

A seller has three options when an offer is received. She can reject it out of hand, can accept it as presented, or she can counter-offer.

If your offer is rejected, you can always present another offer which is closer to the seller’s asking price. Or, if price is a concern, you can keep looking for something else.

If the seller counter-offers (which is the usual practice) then you can slowly begin to narrow the difference between the two prices until hopefully you both reach that happy medium.

Once you have a signed contract to purchase, the negotiations should not cease. First, you have to determine what kind of mortgage loan you want. Do you want the security of a fixed 30 year loan, where your monthly payments will remain the same? Do you think you will be selling the house within the next 5-7 years, in which case you may want a 5 year adjustable rate?

Incidentally, I do not recommend a 15 year mortgage. True, the rate will be less than a fixed 30. But your monthly mortgage payments will be higher. With a fixed 30, you have the right – but not the obligation – to make larger monthly payments, as if you had a 15 year loan. And if you need that extra money – or if a better investment comes your way – you can always go back to your regular 30 year payment.

You should shop around and compare mortgage interest rates with a number of mortgage lenders in your area. Presumably the real estate agent will give you a name or two of potential lenders. Certainly you should contact them. But don’t stop there. Check out at least five lenders to try to get the best rate for your purchase. Then make your decision.

After you select your lender, once again the negotiations should continue. Your contract should contain a provision that the contract is contingent on your obtaining a satisfactory inspection by a professional home inspector. Typically, there are two kinds of inspection contingencies. One gives you the absolute right to cancel the contract for any reason based on the results of the inspection. The other requires that you provide a list of problem areas to the seller, who has three days in which to agree to all (or some) of the issues. If the seller agrees to your concerns, the contract remains in full force.

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