In much of American life, prices are fixed. What’s on the label or the menu is what we pay. But in real estate transactions, not only are prices negotiable, so is nearly everything else, too. That’s why it’s always worthwhile to make counteroffers, and to question the specifics of all the smaller details that surround buying and selling a home.
The most commonly negotiated matters are price, the amount of earnest money, the closing date, and which items will be conveyed with the sale, such as washer, dryer and refrigerator.
One very important matter for negotiation, which has a direct impact on the price, is how to address needed repairs after the home has been inspected. A seller can choose to repair everything on the inspector’s list; to repair nothing; to repair only some items; or to offer a credit to the buyer. Of course, the buyer will have to agree to the seller’s response. It’s worth remembering, however, that repairs usually cost less than the amount the sale price would likely be reduced.
But that’s not the whole list. Others things people often negotiate are:
- Home warranty: to include one or not?
- Who pays assessments for such things as homeowner association dues.
- Whether the seller pays the buyer’s closing costs. This ordinarily occurs when buyers are using most of their funds for the down payment, or when they’re saving money to make improvements after they buy.
- Whether the seller buys down the interest rate. This isn’t very common now, with mortgage rates having been historically low for so long.
- Improvements to the house prior to closing. This is a somewhat different category from repairs to structural damage or broken equipment, mentioned earlier. “Improvements” refers to optional work that will make the property fresh for the new owner, such as repainting the interior, refinishing the floors or replacing carpet.
- How long the “due diligence” period lasts, and what fee to apply. A buyer who needs a longer due diligence period should expect to offer a higher, yet reasonable, fee.
- Who will be in possession of the property immediately before or after the closing, the buyer or the seller? For how long?
- Furniture, if any, that will be included with the house. This might include such items as patio furniture or a pool table. And while this is something that’s often negotiated along with the purchase of the house, it is usually handled in a “side deal.” That is, instead of wrapping these extras into the closing, subject to the mortgage, buyer and seller will work out a separate cash or trade arrangement.
- Items that are not included in the sale. The seller may choose to take certain things that might normally be considered part of the property, such as curtain rods, rose bushes or wall-mounted TVs.
- Seller financing: if this is applicable to the purchase, every aspect of the loan is subject to negotiation.
- For vacation-rental properties, whether a seller can continue to book rentals that are scheduled to take place after the closing date.
- A related question is whether a seller can use the vacation home for a specified time – maybe one week a year – for a fixed number of years after the property has sold.
This isn’t an exhaustive list. Almost anything you can think of can be negotiable. Keep in mind that the essence of negotiating is give and take. If you want something from the other party, be open to what they may want in return, but also have a firm idea of what limits you’re not willing to go beyond.
Many people aren’t comfortable with wheeling and dealing. If you’re one of those people, you can still negotiate effectively, with your Realtor as your representative. Let your real estate professional know what’s important to you, whether it’s financial or details about the property, and let them work to get you the best possible deal.
Michelle Clark is a broker with Intracoastal Realty, based at the Wrightsville Beach office. She is an Accredited Luxury Home Specialist, ALHS, Seniors Real Estate Specialist, and also a Short Sales and Foreclosure Resource. Whether you are buying, selling, or investing, know that Michelle and her team will go the extra mile for you. To learn more about Michelle and Intracoastal, go to www.intracoastalrealty.com. You may contact Michelle at [email protected] or 910-367-9767. Like Michelle’s team on Facebook at www.facebook.com/MichelleClarkTeam.