Month: March 2020

The art of negotiation is fickle and nuanced. A lot of the time it’s important to use your gut and get creative in order to get what you want. Like with anything, however, there are certain principles that are sacrosanct and need to be employed, such as ‘never accept the first offer’. 

Anyone who knows anything about negotiating knows that the first offer is usually a lowball offer. Whomever is making the offer knows that no matter what number they put out there, there’s very little reason to expect the seller to accept it. This forces them to purposely make an offer below what they think is fair in order to eventually get close to something realistic.

While real estate negotiations are similar to other forms of negotiating, there are many aspects that set it apart, as any good real estate agent knows. One such aspect is when to accept the first offer.

Generally, unless the first offer is irrationally high, the best thing to do is field offers from other potential buyers to better gauge what the market dictates you can get for your home and in ideal scenarios, precipitate bidding wars. However, because the real estate game is unlike any other game, there are scenarios in which accepting the first offer is a good idea.

1. After Finding Your New Home

In real estate, most purchases are made with contingencies that the buyer sell their house first, as not to be forced to carry two mortgages and a whole host of other potential complications. If you’ve already found your new home and you’re not getting a lot of bites on your current home, this is a scenario in which it may be a good idea to accept the first offer, provided it’s reasonable. The last thing you want to do is put the deal on your new home in jeopardy, finding the right home isn’t easy.

2. Relocating For Work

Relocating for a new job opportunity can be exciting, but is generally very nerve-racking. It’s not easy leaving your hometown for somewhere unfamiliar and coordinating all the necessary logistical aspects for a smooth transition. Compounding that stress with a complex home sale is not a good idea. Provided the first offer is reasonable, take it. There are many other things you’ll be inundated with during this stressful chapter in your life.

3. Cash Offer

Did someone say cash? Accepting a cash offer circumvents many of the issues associated with a complicated closing, like not having to wait for the loan to be approved. Additionally, if someone has that much money on hand, they’re likely not buying on the contingency that they sell their old residence, eliminating uncertainty and complications associated with them selling their current home. As long as the offer is reasonable, accept it, it will make your life easier by simplifying an already complex transaction.

Before buying a house, make sure to hire a professional inspector to come to look at the property. Otherwise, you might not know if there are any major problems with the house, which could cause major headaches down the road. It has almost become standard practice for a buyer to have an inspection, but even if you plan on having an inspection, there are some common mistakes you should avoid. 

Not Picking The Right Inspector

An inspection is only as good as the inspector, so don’t just go with the cheapest one. Besides, the cheapest inspector could be inexperienced or they could have trouble finding clients for other reasons. 

You don’t have to hire the most expensive inspector either. They may be charging too much for a job that could be done for less. The bottom line is: make sure you do your research. Even if your realtor suggests an inspector, it can’t hurt to go online and check them out. 

Visit their website, check out reviews and testimonials, and make sure to ask them for a sample inspection report. You want them to include lots of pictures and details that explain the home’s strengths and weaknesses in their report. Then compare their sample inspection report with other sample reports to see how thorough they are. You want as much information as possible so you can get accurate estimates on how much different repairs will cost.

Not Personally Attending The Inspection 

It is important to meet the inspector and shake their hand. Knowing the inspector on a personal basis could come in handy down the line when you have a question about the inspection report. If you know the inspector, you can call them up and ask them about something.

Also, you want to know that your inspection is being done properly, but if you don’t stick around for the inspection, it is pretty hard to tell if they are rushing through the job. 

Skipping the inspection also means you probably won’t get another opportunity to see certain parts of the house until you own it. You might not have seen the attic crawl space or inside the electric box during the open house, and the home inspection is a perfect time to tell if there are any problems with those sorts of areas before it’s too late.

Lastly, you want to be there during the inspection to talk to the inspector about certain problems. It’s one thing to see the inspector’s notes in the report, but those can often be too technical for the average home buyer. If you are at the inspection, there’s a good chance that the inspector will talk you through any problems they find. 

Not Letting The Inspector Do Their Job

While it is important to be at the inspection, you should be aware that the inspector is focused on looking for flaws in a house they’ve never been to before. You want to ask them questions, but it’s best to wait until they are done with one area before you start talking their ear off. 

The worst thing you can do during an inspection is hover over the inspector and distract them so much that they end up missing some major problems. An inspector should be there for about 2-4 hours, depending on the size of the house and the problems they find. So, there is plenty of time to talk to them about what they find at some point during the inspection. 

Many times, the inspector will initiate the conversation. Inspectors are not always the most chatty people, but when they find a problem they will usually call you over and explain things to you. It might be difficult to comprehend what they are talking about if they are explaining technical issues, but if you’re not present, it will be much harder to understand an issue while you are reading their report. 

Not Taking Lots Of Pictures

Inspectors will often ask you to take pictures while they are explaining a problematic area to you. These pictures could come in handy when you are trying to get proper estimates down the line. You should take as many pictures as you can, especially when it comes to anything that the inspector told you might need attention. You want to get close-ups from multiple angles and capture all the serial numbers and stickers on anything you can. 

You should even take pictures of things that might not seem important at the moment. You might not need these for getting estimates, but there might come a time when you wish you had them. The inspector will also be taking pictures during their inspection, which will be included in the report, but they are often smaller and might be hard to see. 

Not Reading The Inspection Report

Even if you followed the inspector around and asked all the right questions, you should still read the inspection report. There might be problems that the inspector didn’t talk to you about because they don’t need immediate attention, but you still want to know that information. You may be able to include minor issues in your request for repairs, which could help bring the sale price down. 

The inspection report will also be a good reference when you want to make repairs or have any problems down the line. If you asked questions during the inspection, you will be more detailed when talking to contractors or technicians later. For all intents and purposes, an inspection report should almost be considered to be the user’s manual for your new house, and the people that read the user’s manual usually doesn’t have as many problems as those who skip it.