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Closing on a House: Negotiations and Agreements

There is no doubt that times can be very exciting when an offer is accepted and a new owner knows they can move forward with the purchase and begin closing on a house.

By Neil Terc Category: 0

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There is no doubt that times can be very exciting when an offer is accepted and a new owner knows they can move forward with the purchase and begin closing on a house. From the seller's side, many of the barriers to buying the property have been taken care of and now it just comes down to the closing logistics, such as the mortgage and inspections, which are meted out with a few rounds of home negotiation between buyer and seller. But (and it's a big one), sometimes negotiations between home buyers and sellers is an uphill battle that few can accomplish. It's not enough just to be strong in an offer and budge little by little as you try to show your pride in the process. Some people just throw out tough statements and act rough as if to let the other side know they are not going to be pushed around. Believe me; this way won't work well in the long run. If anything, it will just turn the other side off to working with you. Good home negotiation comes with understanding the other side's key points, prioritizing them, and working on overcoming them. It's one of the best ways to make sure everyone agrees to the same terms when closing on a house.

During this key home negotiation process, real estate agents can be very beneficial . Not only have they taken classes on how to negotiate and reach amiable terms for both sides, but their experience has allowed them to see what works (and when) and what doesn't when closing on a house. There is a fine level of finesse in the home negotiation process that requires you to know how to get what you want out of the situation.

The Art of Home Negotiation: Understanding the Other Side

When sending the contract offer, you will need to bring up the points you want to negotiate and allow the other side to bring up their points of interest as well. This will usually happen when some of your terms are not accepted and the seller decides to counter your written offer. It is essential for both sides to understand what is important to each other when a buyer is closing on a house. Balance comes from fully understanding the other side's key points during any home negotiation session.

Internalizing and digesting this information during a home negotiation session will help you compare and contrast this against your own needs. If there is something you aren't willing to concede when closing on a house, you can use this information to leverage other terms that the seller will easily grant you.

Prioritization of Key Points in the Process

Once you have an understanding of which points are important to you and the other side as well, you will need to also know how those measure up. How important are they for you to continue closing on a house? You will need to know what will be acceptable or become a "must have" to you so that you can feel comfortable before signing on the dotted line and moving to your new house. Whether you are using a real estate agent or writing the offer yourself, you will need to disclose those requests in the written contract offer so that the previous homeowners can legally receive your proposal with what you are petitioning. Since your needs will be in contract form, you can be sure to cover every term or, at the very least, bring up your points for discussion with the seller. If not named or mentioned in your contract offer, you may forget specific terms you want addressed during the home negotiation session and you may lose out on what you really wanted to accomplish. In most cases, the seller is willing to make a number of concessions when closing on a house, and if you're prepared, you will be able to make it worthwhile for both sides.

If the seller counters on your offer, prioritizing the other side's key points helps you so you can use some of your requests and offer to give them up if they are willing to do the same on their side. The purpose of both sides is to agree on the most important points when closing on a house. For example, if the seller is willing to include the kitchen appliances but not fix a bathroom you requested to be fixed in your contract offer, this may or may not appeal to you and should fall appropriately within your prioritization scale. Most importantly, however, keep your eyes on the goal during any effective home negotiation session and keep the communication going!

Overcoming the Obstacles on Either Side

Explain why each term you are asking for is crucial during the negotiation process. This is another reason why I strongly suggest that buyers and sellers use agents. It will be something both sides will be able to use to help prioritize what's important to each, i.e. what you can or can't live without. Explaining each side helps with persuasion and plays a big part in home negotiation. Obviously, you'll also want to avoid damaging the relationship that you have with the seller - and closing on a house is where that fine level of finesse plays a large role. Understanding that this meeting of the minds should be a win-win situation for everyone is vital to your approach and ultimate success for effective home negotiation.

The company that I work for (and other similar companies) can help you with closing on a house as well as the numerous other steps that are involved in the home buying process. Using a real estate agent is highly recommended throughout the entire process of closing on a house as they have access to unlimited resources and are trained in home negotiation and getting the best deal for the buyer.

Overcoming the obstacles is easier when you realize you must turn this part of the home buying process into something that's profitable not only for you but beneficial to the seller as well. This kind of give-and-take when you're closing on a house will ensure the seller concedes to a great deal of your requests willingly - and maybe even with a smile.

About the Author

Neil A. Terc is the president of YourKasa.com, a unique, interactive website that lists real estate properties from both realtors and homeowners. Terc created the website to offer advice and discuss the common challenges that face new homebuyers and sellers. For the last seven years, he has been purchasing, selling, and leasing properties and is a self-taught real estate professional. To see some of the website's real estate listings online, visit www.yourkasa.com.

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