Shari Sanderson at Award Realty
News > Negotiating a Home Buying Home Run
published on 2011-05-01
Every home buyer needs to know a bit about some of the nuances of negotiating a home purchase. The more informed you are, the better prepared you’ll be to navigate through the buying maze. Since Las Vegas was one of the top ten cities to take a beating in the real estate market, it’s also one of the best bargains in the country. Over half of all home sales in Las Vegas are foreclosures and short sales, but that’s only good news for you if you know how to negotiate in this tricky market.
The Lowdown on Short Sales
Short sales are confusing! To simplify, a short sale occurs when a homeowner is unable to pay the balance of his mortgage and other property liens, and all lenders agree to release the liens and accept less than what’s owed. Remember, a short sale must be approved by all the property lenders.
Once a short sale is approved, lenders determine how much the property is worth. They may request a Broker Price Opinion (BPO) or an actual Real Estate Appraisal.
If you find a listing for a short sale – oh, let’s say $10,000 less than other listings in the community, take heed. There’s a good chance that the seller’s lenders haven’t even approved the price yet. Or, the agent might be listing low to attract multiple offers. In any event, prices for short sales must be reasonably close to the lowest price of similar homes that sold in the vicinity. If not, the bank won’t approve the sale, and you’ll have wasted a lot of time.
Will the Seller Pay Closing Costs?
They may. We can include this in our negotiation strategy if lowering your out-of-pocket costs are important. Closing costs average 2 to 3 percent, depending upon lender’s fees. If the seller agrees, you’ll have extra cash to use towards a down payment or other home buying costs.
Bank-Owned Properties for Cheap
The adage, Caveat Emptor or Buyer Beware, also applies to real estate. Advertisers often create clever “list” prices. Beware of advertising that offers homes for huge discounts, such as 30 percent or more, off list price. Bank-owned homes are already priced close to what a lender will accept for an offer.
If we know a property is under-priced to attract multiple offers, we’ll let you know. We may encourage you to make an offer over asking price to avoid being shut out. Trust that we’re experts in handling bank-owned sales. Use our experience to guide you in determining the right price to bid.
I Have Good Credit. Do I Need to Prequalify?
YES! A good credit score is only one factor in the loan approval process. Qualifying for a home loan is more difficult than it was before our nation’s housing crisis. Potential red flags for lenders include:
- Short sales or foreclosures in your credit history
- Owning more than one home
- Loans that exceed conventional loan limits
- Self-employed borrowers
- Borrowers with significant income from sources other than employment
Don’t wait until you find the perfect home to discover there’s a glitch in your application. To be in the best negotiating position, your ability to get a loan must not be questioned. Prequalify now.
A Home with a View: What’s it Worth?
A good rule of thumb: A fair price for any property is what the buyer will pay and what the seller will accept. There’s no clear cut formula for pricing a property with a view. However, there are guidelines that we can use to help you price a view. We look at recent sales of comparable properties in the community. If only one home with a view sold recently, it may be necessary to look outside of the neighborhood. Factors such as a home’s amenities, layout, and location are considered, as well.
Don’t forget to think several years down the road. Will that great view still be there, or will it be obscured by other homes or shopping strips? Check your local building codes. Is there any regulation that prohibits “building up?” If not, the home with a view that you paid a hefty premium for today may not have the same value tomorrow.
How Much Do I Offer?
You’ve found a home you love. You know the asking price. What should you offer? We’ll help you determine the best starting price. Some factors we consider:
- Similar homes that sold in the vicinity and what they sold for
- How much the seller owes on his home
- How long the home has been on the market
- Price history – has the seller lowered or raised the price
- Property history – has the seller listed the home before and if so, for how much
At this point in the buying process, our skills of negotiation can help you. Whether you’re looking at a bank-owned property, a short sale, a new construction, or a resale in Las Vegas, contact us and allow us to assist you in every aspect of the negotiation process.
Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.
The Fair Housing Act prohibits discrimination in housing based on color, race, religion, national origin, sex, familial status, or disability.
Information Deemed Reliable But Not Guaranteed. The information being provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information, including square footage, while not guaranteed, has been acquired from sources believed to be reliable.
Last Updated: 2023-06-05