It is rare, particularly when dealing with
older houses in need of renovation, that a seller expects to
receive the asking price of the house. It is up to you, the
buyer, to pay as little as will possibly be accepted. Here are
some suggestions for your negotiating strategy:
-
Exercise the most extreme politeness, even
if you don't trust those you are dealing with.
-
Gently but firmly mention the flaws you
have found and how much they are apt to cost you to fix.
-
Let it be known that you are looking at
other houses as well as this one.
-
Make an offer twice as low as you expect
to pay: the seller will surely not accept your offer, but
will make a counter offer.
-
Ask the owner to include certain repairs
as part of the deal.
-
Ask the owner to include in the deal
certain items, such as
-
Furniture
-
Tools
-
Appliances
-
Restoration Materials
-
Ask the owner to pay your closing costs or
give you the time remaining on the insurance policy to
reduce your start up costs.
-
Explore the idea of the seller's giving
you a second mortgage at a lower rate than the bank is
giving you on the first mortgage; if the seller is
planning on investing the profit from the sale, the
interest you are willing to pay him or her may be more
than bank or other investment interest will yield.
Watch out for sharpies who just want to make a lot of
money on a house that is worth a little.
To get you through the legal technicalities, hire a real
estate lawyer at an hourly rate. You may find you actually
save legal costs incurred in broker-handled closings. Make
sure your lawyer protects your interests adequately.
This Homebuyers Tip was
excerpted from:
Reviving Old Houses by Alan
Dan Orme, Garden Way Publishing, 1989.
ISBN# 0882665634
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