How can you get a good deal on a home you buy and still leave the seller smiling?
One answer can be to discover–and then accommodate–the seller’s timing.
There are many reasons why a homeowner may want to hasten a move or slow it down. And adapting to the owner’s schedule could put you in a strong bargaining position.
“If you can hit a hot button that appeals to the seller on time, you may get a lower price,” says Leo Berard, charter president of the National Association of Exclusive Buyer Agents.
In a buyer’s market, an offer shaped to the seller’s time requirements can save you as much as 3 to 4 percent on the price of the property, Berard estimates. In a hot seller’s market, it could allow you to outdo rival bidders for a home.
“If the seller wants to get out yesterday, and you can get your financing lined up and close in two to three weeks, you can often get concessions on terms,” says Robert Irwin, author of “Buy Right, Sell High” (1997, Dearborn Financial).
“On the other hand, some people don’t care how long it takes to sell,” he adds. “They’ll just hang in there until the price is right.” Owners of prized properties, such as those on prime waterfront sites, may be able to hold out without penalty.
Far more common, however, are sellers on a racetrack, says Berard, who runs an independent real estate brokerage firm. Perhaps they’re facing a hasty job move or have to liquidate the house swiftly due to a divorce or medical problem.
Occasionally, a seller needs plenty of flexibility in his or her move-out date, notes Mary C. Bigler, a broker-associate for Coldwell Banker. If they’re having a home built–and don’t know exactly when the new property will be fit for habitation–they may want an extended move-out date. Ditto if they’re trying to keep a teenager in the same school until the end of the academic year.
Of course, many buyers have their own time preferences, perhaps because they’re coming in from another state for career reasons or because they’ve already sold a previous home. Even so, a buyer willing to adapt to a seller’s time schedule could well be rewarded at the bottom line, Berard says.
“The buyer has to put on the seller’s hat and see what terms and conditions are most important to him,” he says.
Here are three pointers for sellers seeking to win through careful timing:
-“Try to feel out the motivations of the seller,” Berard says.
Obviously, the more you know about the owner’s time-frame, the easier it is to structure a deal that caters to his needs in exchange for concessions to you.
Discovering a homeowner’s plans is usually easy. All you have to do is ask the seller (or his agent) why the house is on the market and when the owner hopes to leave.
However, an occasional seller will deliberately be mum about his moving plans, especially if he’s in a rush and knows that conveying urgency could weaken his bargaining stance. Even so, it’s likely the seller has inadvertently left a trail of clues about the transition in his life.
For instance, prospects for an upper-end home learned by chance that the owner had already purchased a new property. As it happened, they were visiting when the home’s owner happened by “to pick up a pair of slacks to take back to my new place.”
Her casual remark let the buyers know that the seller was no longer living in the house and was bearing two mortgages, which made her a motivated seller.
Although some real estate agents don’t endorse the strategy, Irwin says it’s often prudent to “walk the neighborhood” and ask local residents about a property you’re considering. Not only might you find out that the home has a leaky roof, but you also can pick up information on why and when the seller is seeking to move.
“You’d be amazed at the things neighbors will say if you tell them, honestly, that you’re interested in living in their community,” says Irwin.
If you learn that the sellers are hurried, you may wish to structure your offer for a quick closing. For instance, you might say you’re prepared to move “on or before” a particular near-term date, Berard recommends.
By the same token, knowledge that the sellers need plenty of time before they have to move–perhaps because they’re building a new home–could suggest the wisdom of proposing a more distant date for closure, he says.
In the unlikely event that information on the seller’s timing is unavailable, some real estate specialists suggest that you propose two or three different sales offers simultaneously, each with a varied combination of price and terms, and let the seller make his selection.
-Ready yourself for a fast move through mortgage pre-approval.
More than ever before, mortgage applicants can obtain rapid and near-certain approval for home financing before they even go on a home tour. That’s because so much financial information on potential borrowers is now available via easy computer access.
A buyer who is already cleared for financing is more credible in his offer to make a hasty move and hence has more bargaining strength, especially if the seller is so hurried he can’t risk a deal that might fall through, Irwin says.
-Consider putting the seller’s convenience ahead of your own.
Flexibility on your part has its own psychological costs. Moving quickly could require that your own youngsters must change schools midyear, for instance. And if you’ve already sold your last house, moving on a delayed schedule could require you to move twice, perhaps taking an interim rental.
Another strategy that would help the seller with a home under construction is to buy his old place now and then rent it back to him until his new place is ready.
Only you can calculate the emotional and financial costs of meeting the seller’s time schedule. “There’s no simple algebraic equation for that one,” Berard says.
