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Negotiation Real Estate Money Tips

5 May, 2017

Negotiation is the high point of
real estate acquisition for me. Thus,
If one of my money tips on real estate
stands out at all, I hope this money
tip on real estate does.

“Negotiation” Money tip No. 1
Spend time reading up on the art of
negotiation.  Everyone will find an
aspect that speaks to them personally
when reading about skills that they’ve
taken for grantit all their lives.

Here is a home-buy scenario that uses
a little negotiation but uses the state
of the nation to win over these sellers
on the idea of carrying a note on their
home.

I am the buyer. I begin by scouting in
the local news paper for “for sale by
owner” properties.  Setting my appoint-
ment to view and meet with the owner
himself, I go through the homes quarters
and landscape, and as the owner guides
me through the maze I keep a rather firm
‘poker face’ never seeming pleased or
excited about any of it.  I do take a
few notes and ask some questions.

Questions I ask are not small-talk
start up questions but rather very need
to know pieces of information that can
help me strategize a negotiable purchase.

While opening some cabinets and examining
the ceiling for any signs of water leakage
I ask when the roof was last redone. I
takes some notes as the buyer fields my
questions about the past maintenance on
the home.

Finally I do get more personal with the
question:  What do you and your wife do
for careers.  This gets down to the
fact that you want to know if their is
another person on title and to find
the sellers sweet spots.  And by asking
I find out the gentleman is married
his wife is retired from teaching and
he is retiring from the heating and
cooling trade.

Almost before leaving I must ask why
the property is being sold.  You
really have to find out the purpose
for the sale of the home in order
to negotiate and present an acceptable
offer.

I come to find out that he is going
to start collecting social security
soon and needs his income from other
sources to be $400 or less and the
misses is just sick of tenants moving
out every 6-months leaving a mess
to clean up.  So now I know that this
was rental property. 

I Leave the property viewing with a
doubtful expression yet NOT loose
the seller’s phone number.

Wait a couple days or ideally until
Sunday night to call the sellor and
invite the “sellers” both to
breakfast or lunch and meet them there
at a quiet scenary restaurant
establishment. I buy them their meal
for them and it opens their mind to
the fact I am not a criminal but a
pretty decent buying prospect.

The idea is to meet on neutral turf
when I begin to explain my offer to
buy the home from these sellers.

I explain that it is really tough to
to tell what a home in this economy
is really worth.  There are two
forclosures on the same street as
this house.  The wages locally do
not support extravagent rental homes.
Yet with high property tax district
you can’t go lower on the rent and
turnover rate is high with peoples
jobs being eliminated and work hours
cut, it’s just the mechanism of
survival taking place. So here
is what I propose.

I propose that the sellors carry
a note for $70,000.  Their asking
price is $108,000 however.  And
I explain myself as follows:  In
order to get a payment at or
below $400 so to not disrupt the
sellers social security benefit
payments the “note receivabe”
must must come in with that low
of payment and to adjust down
the principal amount on the note.
Now I set a rate on my offer of
14%.  That is so the “note rec-
eivable” will have cash value
for liquidation of the “note
receivable” should you want to
be cashed out sometime in the
future.  I am offering you a
sum total of 35-years of $400
per month payments. The future
value of that income stream is
$168,000.  If I payoff early
I owe you the full $168,000
payoff should you want to add
that prepay penalty to the note’s
conditional financing clauses.

So I am offering you more than
your listing price of $108,000
and paying you every month for
the home you no longer have to
fuss over anylonger.  You could
also add beneficiarys.  You
would not have your equity in
the home taxed heavily by drawing
a large lump-sum proceed from
sale like you would by selling
the traditional method.

That is my offer.  I can only
rent this home at what I would
be paying for it plus its property
tax escrow added together.
Add homeowners insurance to this
and I am actually over extended.
Even with that little $400 per
month payment, which you need. 
I would have to tolerate a
loss on the property as a rental.
But I may just move in while I
update and rennovate it a bit.

WHY IS THIS A VALUABLE MEANS OF
PROPERTY TRANSFER?

Because the neighboring homes
within a two-mile radius of
this home after it closes in my
name for a note Principal of
$70,000 will automatically low-
er market prices as this sale
will have to be part of the
comparable homes an appraisor
must consider when pricing out
a near by house of the similar
characteristics and amenities.

A natural lowering effect of
home prices would help the ever
shrinking wages being paid by
corporate America since
several desparate people will
take the job over no job – all
day long.  The wage earners
are to plentiful to embrace any
power over wage scale.  We
have shipped our jobs overseas.
And yet the profit of the bus-
inesses comes from American
consumers, we pay it out to
workers overseas.  To save a
buck or two even a few cents.
American management of their
businesses has sold out the
vary country profits come from
and the home country these
businesses were born in.

What are your thoughts on these
realities? 

tweet me or go to the “Write Us”
tab on this web site where there
is an available direct submission
to my email from your note there
that you conveniently can comment
and send it to me.  Otherwise,
I am on Twitter.  Go to
http://twitter/amjustsayn  and
send me your comment or questions.

Thanks for visiting my web site.
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know what I can improve upon I
really welcom all feedback.

Yours truly,
Cheryl A. Eld
Web Copy Editor
& Webmaster



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