TIPS FOR BUYERS

 Buyer Q & A                                             

Q1:  What are some tips on negotiating a price for the home I want?

The more you know about a seller's motivation, the stronger a negotiating position you have. For example, a seller who must move quickly due to a job transfer or a divorce may be amenable to a lower price with a speedy escrow. 

However, in today's market, many home sales involve dealing with a bank who has never lived in the home. With short sale homes, the bank holding the mortgage is already losing a lot of money. Usually, the bank does not like to go lower than the list price. In the first place, the list price was set by the listing agent for the owner and the bank has not agreed to it yet. Therefore, sometimes the bank wants even more than the list price, so you have to negotiate, which is the job of your buyer's agent.

When the bank already owns the property because the foreclosure is complete (REO), the list price is usually the lowest price amount the bank wants. There can be negotiating room if it has been on the market a long time, however, that usually means an undesirable home.

 Before making an offer, have  your buyer's agent check the recent sales prices of comparable homes in the neighborhood to see how the bank's asking price stacks  up.

Some experts discourage low-ball offers. While such an offer can be presented, it can often sour the sale and discourage the seller from negotiating with you at all.  

Q2:  How do you find out the value of a troubled property?

Buyers considering a foreclosure property, you should obtain as much informatation as possible from the bank about the price range they will consider. However many banks are not very forthcoming. Therefore, ask your buyer's agent to do an analysis for you of comparable properties.

Q3:  Would a mortgage just be a financial burden?

The answer is that the relatively low interest rates of today's market combined with the numerous tax and equity benefits of home ownership are a reward rather than a burden when you invest in buying a home. Also, with today's low home prices, your monthly mortgage payment is often about the same as you would pay for rent and sometimes even less.

Q4: What questions should your agent ask the listing agent of the short sale house you want to buy?

Before you make an offer, ask your agent to check and see how competent the listing agent is at doing short sales.
The listing agent is the agent with the property for sale. They will usually be in charge of processing the short sale with the lender. Many short sales do not close. So you need to improve your chances at it closing.

If the listing agent is a genuine short sale expert and knows what they are doing, then you have a good chance of the short sale being approved and buying the home.  If the agent is not a genuine short sale expert, then you are probably wasting your time. So ask how many short sales they have done successfully. If they are new at short sales, you should seriously consider finding another home to buy.

Also, make sure you find out how many loans are on the property. If there are 2 or more loans, the negotiations with the banks are much more complex and there is less likely to be a successful closing.

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