Tips for Buyers

Things Your Realtor Should Do for You
When Negotiating the Sale!

It's no secret that listings are up and homes are taking longer to sell. It's a buyers market again, and that's good news for home buyers. The single most important reason to hire a professional realtor is to get the best deal possible in negotiating the sale. But without training and experience in contract negotiations, how do you know if your realtor is really working for you?

First and foremost, whether you hire a buyers representative or not, your realtor should be ready, willing and able to guarantee that they represent only you-the "buyer" during the real estate transaction and in Oklahoma State, that means they are a "single party" transactional broker. Unless your realtor signs a Single Party Agreement or an Exclusive Buyer Agency Agreement, you can assume they are working for the seller to close the sale for the highest price possible.

It might pay to also remember that even with an agreement your realtor may not be on your side. It's just a fact, realtors make their income off the homes' selling price, and the higher the price the better the commission, which is why some realtors won't even bother to negotiate insisting that their clients only offer the asking price to the seller.

An offer to purchase is essentially a legal agreement between the buyer and seller as to the price, terms, and conditions of the sale that will be written into the final agreement which is presented to the lender and signed at closing. So here is a list of things your realtor should include in the offer to purchase:

Tip #1: Never, never ever offer full asking price even when you are willing to pay it. Anyone can pay full price but you can never pay too little. Make your first offer the lowest realistic price you can. A good realtor will suggest offering from 5 to 15% bellow the seller's asking price, while taking into consideration all of the concessions you want the seller to make.


Tip #2: Ask the seller to pay some or all of your closing costs and pre-paids which are multiple fees involved in the real estate transaction. Examples of these are title fees, discount points paid on your loan, origination fees, taxes, and insurance. As a rule of thumb, in Oklahoma you can request the seller to pay up to 6 percent of the sales price toward "any and all allowable costs to close".

Tip #3: On existing homes, ask the seller for an allowance or credit to help with improvements such as new carpeting, updating appliances, painting, landscaping or other major repairs the house might need but remember to check with your lender because they may have strict requirements on the wording and handling of allowances during the sale.

Tip #4: Always ask for a home service warranty on existing homes older than 3 years. Even if the seller has done recent updating on appliances or mechanical systems such as heating and air conditioning you can never have enough protection when buying an older home.

Tip #5: Request Contingencies. Make sure your realtor includes basic contingencies for appraisal value vs. offer on price. If the home fails to appraise at the purchase price or greater the seller has to lower his price. Also, set a repair contingency to cover most of the expected repairs that the seller must make up to a certain dollar amount. I always suggest my clients ask for repair amounts to be set at $5,000 in the initial offer. Of course, this usually gets negotiated down to about half.

Tip #6: Extra Perks. Keep in mind, everything is negotiable in real estate. Don't be afraid to ask for more but be flexible enough to relinquish on items that are not very important. In other words, don't sweat the small stuff.

One final note, most deals fall apart after three rounds of offer and counter-offers. If there is "no meeting of the minds" be prepared to walk away.

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