B - Increase the Buyers Offer: Any situations provide opportunities?
Get stubborn buyers up in priceYou've been going back and forth and reach a point where the buyers don't want to increase their offer. You might even say to them, “Well I guess we both need to think about it.” If they don't get back to you in a couple of days, call and say, “We really don’t want to go any lower and obviously you don't want to go any higher. We like you as buyers. We’ve thought about it and we are willing to split the difference with you.” This is great. You come across like a very fair-minded person, reaching out to help make a deal work. You lowered your price from what seemed like a sure deadlock. If the other party balks, they will appear unreasonable. This almost always works, but the two sides must be in striking distance (5 percent) of each other before this technique can be effective. Don’t wait longer than a day or two to call the buyers with your proposition because many buyers get to a point where they feel that a deal is dead and they start thinking about all the reasons why they shouldn’t buy your house in the first place. Negative reasoning is a common coping mechanism to rationalize why something wouldn’t have worked or simply that they made the right decision to walk away from the deal. Don’t let them wait long enough to get to this state of mind. Get first time buyers up in price: First time buyers and limited fundsYou may find buyers who are short on down payment money. Their written contract offer provides the evidence; their earnest money amount and how much their down payment will be, making them easy to spot. First-time buyers with less than 10 percent down are very common. These buyers try to balance how much they’re putting down, how much they’ll need for closing costs and how much money they want to hold back for those after-purchase necessities. If they could put more money down, they could bid higher. Creating money for these buyers: During negotiations, let’s say you reach a brick wall: you want them to come up $3,000, but the new buyers simply can’t afford to go any higher in price. What to do? Make a counter offer $5,000 higher than the amount they last bid, but offer to pay for $2,000 of their closing costs. Point out how this nets you the $3,000 more you need while it's like giving them $2,000 in cash. This credit of $2,000 will eliminate $2,000 of their closing expenses so that they can buy more furnishings, put more money down or they can even buy down the interest rate. Putting extra money toward closing costs can help cover miscellaneous expenses such as loan origination fees, title insurance, inspections, etc. They may also specify a portion of it as a decorating allowance. Most lenders will help structure this type of arrangement as long as it’s not such a high amount that it’ll put the appraisal in jeopardy. If you’re dealing with first time buyers, they’ll go for it. Resolve the non-price issues first: Besides price, there are always items in the purchase offer that enter into the negotiations. Examples would include buyers who are focused on the possession date due to job requirements, the earnest money amount, contingency on the sale of a home, appliances included, closing costs, etc. Let’s make a deal: Some people feel these other issues should be resolved before the price is addressed. Wrong. A negotiation focused on one issue (especially price) has the potential of producing a winner and a loser, a situation that can set the stage for a failed negotiation. Having other issues allows for give and take. “I'll come down $2,000, but we want to keep the freezer”. “We’ll meet your price but we feel it’s only fair if we have three days after closing to move out completely.” You get this, I get that. You need these items, whether they are tangible or intangible, otherwise you’ll have nothing left that helps to justify movement of the price.
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