Unless you are looking at purchasing a FSBO, the chances are very good that there will be four entities in the transaction; you, the seller, the seller’s real estate agent and your real estate agent.
When you are looking at buying a FSBO, you have a large amount of interaction with the seller. The seller will typically show you the house and will negotiate the contract directly with you. That gives you many opportunities to point out defects in the house that can be used in the negotiations to help you obtain either a better price or better terms.
When dealing with real estate agents, it is quite common for the seller and buyer to not meet until the closing - and even then many closings are done separately so the seller and buyer may never meet.
The typical process is that you sit down with your real estate agent and write up a contract. Your real estate agent faxes is to the seller’s agent. The seller’s agent then goes over it with the seller (and hopefully understands what the clauses mean and makes an effort to sell the deal to the seller.)
With that many degrees of separation between you and the seller, you lose a lot of negotiation leverage. All you can do is put clauses in the contract and hope for the best. And if you negotiate after that, it is the same back and forth process.
There is a better way - provided your agent is up to the task.
It works like this.
When writing the purchase contract, you explain to your real estate agent every defect you saw and explain exactly how you arrived at the price and terms you put in the contract. Work with your agent until he or she totally understands every element of how you arrived at the deal you are presenting.
Next, insist that the contract be presented by your realtor to the seller’s agent and the seller at the same time - and in person.
This allows your agent to go over the same details that you would have covered in a FSBO deal. And it gets the seller to understand exactly how you arrived at your figures.
If you can get your agent to agree to this, it is much better than leaving the contract to blind luck. Lets face it. All it takes to destroy a deal is for the seller’s real estate agent to say something like “We have an offer but I don’t think it is very good.”
This method, when you can work it, pretty much removes the seller’s agent from the negotiation loop. And that puts you in a position of more power in the contract negotiation process.
One Comment
Hi. I am a long time reader. I wanted to say that I like your blog and the layout.
Peter Quinn
Post a Comment