You eventually get an offer on your house. Now what? In Texas, the offer comes as an a 9 page contract. Some of the items covered and to be negotiated are shown below.
Offer price: Rarely does somebody expect their first offer to be accepted. They want you to counter offer. If the offer is way too low, An agent would recommend that you thank them for their offer, but ask that they please come back with something reasonable to begin negotiations. Otherwise you are simply dropping your listed price.
Down-payment and earnest money: These help tell you about their financial capabilities. Minimum down & minimum earnest money could mean they’re borderline capable to buy the home.
Title policy: This is typically paid for by the seller. The choice of title company is negotiable. Get your Realtor’s advice on this. You cannot afford to have this bumbled.
Survey: If the seller has an existing survey, it may work for the purchaser. There are lots of variables here though. If it does not work, the buyer’s bank will demand a new one, so this is likely to be a buyer’s cost.
Home warranty: This is always asked for by the purchaser and normally paid for by the seller ($400-450 typical). This makes the buyer more comfortable that repair costs in the 1st year could be covered by this.
Closing date and date of possession: These are important, and in fact might be critical for one party or the other. This is a strong negotiating point if one party needs quick possession; or to lease the property back for a period; or otherwise has a critical date.
Buyer costs to be paid by seller: This is a tricky one. Utilized by buyers who need to (or have to) purchase house with minimum up-front costs. Sometimes the sales price can be bumped up to compensate for some of this. Be careful of appraised price though.
Option fee: This is the amount paid to seller for the unrestricted right to terminate a contract without cause. It is typically $100 for 10 days. It’s the period for the purchasers to do all their inspections and to negotiate any repairs.
Anyhow, find out all you can about the buyers to figure out their true needs , then negotiate all these points at the same time. As a Houston Heights Realtor the author has found that you don’t negotiate price alone then come back to other points. All of them fit together.
At least now, you have some basic points to negotiate and know what to do with an offer on your house.
Rich Martin is an a Realtor for Anderson Properties in Houston Heights. He concentrates on Woodland Heights Homes, and other surrounding older neighborhoods such as Brooke Smith Homes. He writes a blog on these old neighborhoods and old homes. He also sells new homes that fit the characteristics of the area.