A Secret of Real Estate Contract Negotiations
This is a little tip that can work really well when you are making an offer to buy a property. It applies to both real estate investors and regular buyers of real estate for their own use.
The contract in this case is already preprinted and has a few fill in the blank spaces for things like name and address and price and a few checkboxes for various other standard clauses - like damage clauses fro problems found during inspection.
And then at the end, there is a blank area where you can write in other conditions for the offer.
For investors, this is the place to put in all the "subject to" clauses that they use that are not covered by the standard contract.
But it can be used for more - and here is where it gets really powerful.
You can use this section to ask for seller concessions - things like a credit for new carpet in the house or a redecorating allowance or for the furniture to be included or for the seller to pay a few points on the mortgage at the closing, etc.
Asking for these things opens the door to further negotiations.
For instance, you may ask to have the seller pay two points on the mortgage, give a credit to cover replacing all the carpets and pay for your lodging and storage of your goods while the new carpets are being put in.
While you may be asking for all these things, perhaps all you care about is getting the seller to pay two points.
This gives you the opportunity to negotiate because there are a basket of points in the offer that can be discussed. If you just asked for a single thing, the seller could just say "no thank you." When you ask for multiple things, the seller - if interested in the offer in principle - is more inclined to give in on at least one of the points.
So for taking a few extra minutes up front when preparing the contract with your real estate agent, you have the opportunity to get thousands of dollars in additional concessions.
