|
Houses Under Fifty
Thousand |
Home Seller Beware
As a home seller, you might
think that you have the upper hand in negotiations. In fact,
even the common saying "buyer beware" implies that
the buyer is the one who has to watch out in any transaction.
But buyers have their tricks too. Some of them are good negotiating
techniques, while others are unfair "dirty tricks."
Either way, you need to know what they are.
Lowball Offers
Low offers, sometimes referred
to as lowball offers, are usually just a classic negotiating
technique, but you may not be aware of how these are supposed
to work. You see, the buyer never expects to get a $190,000 home
for $150,000. But the low offer alters your expectations, and
so when he later offers $170,000, you might say yes - even though
$179,000 was the lowest you thought you would go.
Some buyers resort to sneakier
tactics. Imagine if an offer comes in for $149,000, which you
reject. Then another buyer comes along and offers $169,000. With
two different buyers going low, the idea that you have over-priced
the house seems more credible, so you accept the second offer.
What you'll never know is that the two buyers were working together.
Get an appraisal if you aren't sure about your price.
Buyer's Scare Tactics
The buyer looks at the roof
line for a long time and frowns, leaving you wondering what he
saw. He pokes his pen into the one piece of rotten wood under
the porch, and mentions carpenter ants. He gets you thinking
that your home has a lot more problems than you thought, and
you better sell it fast. Be ready for the low offer that is coming
- or get a second opinion.
Contingencies In The
Contract
Sometimes called "weasel
clauses" by investors, there are always clauses in an offer
that give the buyer a way to back out of the deal. Some of these
are unavoidable. A bank won't say yes to a loan until there is
an actual offer, so a buyer needs to make the offer contingent
on recievng the loan. A buyer isn't a home inspector, so it is
reasonable that the offer have a clause that allows for an inspection
that shows everything to be okay.
On the other hand, there are
contingencies that seem reasonable, but are simply intended to
provide a way out of the deal. For example, the offer comes in
with, "This offer subject to approval of the house by buyers
wife, within three days." Now if a better deal comes along,
he can dump yours by having the wife walk through the house and
say no. You might still want to accept such an offer, but be
wary of any that have long deadlines that can waste your time
(10 days is common for an inspection, while 30 is just an attempt
to buy time for some other reason).
Unfortunately, contract contingencies
are sometimes meant to be negotiating tools. A buyer sees the
olsd shingles on the roof, for example, but when the inspection
comes back ten days later saying "Roofing shingles are old
and worn," he acts surprised. He reminds you that he has
the right to approve the results of the inspection or back out
of the deal, and then asks for another $8,000 off the price.
You have invested weeks into this offer now, so you sigh and
agree.
This could be seen as good
negotiating or dishonesty, but either way you want to avoid the
situation. To do so, have every possible problem in the house
documented in a disclosure form that the buyer sees before making
an offer. And have him sign it!
Home Buyer Delay Tactics
You may have a deadline of
some sort. Perhaps you want to sell before the school year starts,
so the kids can be in their new school in time. Maybe your new
job starts in a month. Whatever time constraints you have, don't
mention them! Savvy buyer will use this knowledge against you.
How? Suppose you need to move
in two weeks. The buyer is just having his inspections done,
and closing is tentatively scheduled for a week from now. The
buyer knows your schedule, and using the pretext of some small
problem found by the inspector, he asks for an additional inspection.
You have a choice. Say no and let him walk - in which case you
can't possibly find a new buyer and close in two weeks - or agree,
which you reluctantly do.
By the time the new inspection
is done, and the buyer has delayed in other ways, you are desperate.
Now he hits you with the news that he can't buy your house unless
you drop the price a few thousand more. Otherwise he walks away,
as he can by not "approving" of the inspection results,
and you have to try to sell your home from far away. You might
agree, right? To avoid this situation, keep quiet abut deadlines,
try not to get too close to them, and use your intuition to judge
the intentions of buyers.
Brute Force Tactics
I was a real estate agent briefly
many years ago. On one sale, the buyer - a lawyer - kept making
every excuse possible to delay the closing and reduce the price.
Even though the seller had been trying to sell his home for two
years (something the buyer knew, of course), he was so tired
of this guy that he was ready to throw away the
whole deal. Then the buyer arbitrarily asked for another $5,000
off the price, with no justification, but with the understanding
that neither the seller nor the agents involved wanted to go
to court. We all just wanted to be done with the deal.
The seller said no, but the
brokers and agent involved decided to take the $5,000 out of
our commissions. This was months after the offer was first made,
and the buyer was already living in the home as a renter, and
nobody wanted to try evicting him and start the whole sale's
process over. That's what is sometimes called a "brute force"
tactic. Intuition may be the only way to avoid a home buyer like
this (and watch out for lawyers).
Houses Under Fifty Thousand
| Home Seller Beware |