Hello everyone!
Your real estate expert, Lance Mohr, and in this video series we’re going over how to
sell a house.
And today I’m going to talk about negotiation.
Alright, so here we are,
negotiation.
Remember, I told you there’s only 2 reasons to ever choose a real estate agent.
Number one is based on their marketing plan of action and number two is based on contract
negotiation, but it’s not always just contract negotiation.
Sometimes there’s going to be negotiations through the whole process.
It might be in the beginning with the contact, it might be
maybe into it a little bit longer during the inspection period, it could be after an appraisal
is done.
So there’s going to be a lot of times where your agent could have to negotiate.
Now, I look
at it this way, when I work with a seller, I look at their money as my money and I have
to say I’m a pretty frugal individual, my wife and my friends will tell you this, and
I look at it as a
dollar saved is a dollar earned.
So I look at my client’s money like mine, their bank account like mine.
I’m trying to save them; I’m trying to make them every nickel I can possibly do when
negotiating.
So a couple things, first off the bat, the first thing you want to do is when an agent
gets an offer, when and offer come in, you never just want to accept the offer without
doing a
little leg work and homework first.
So what happens is I’ll get an offer and now unfortunately a line of real estate agents
when they send offers, they send them via email and they never call
you, they never text you, you have to pick up the phone and call them.
So what I’ll do is I’ll do a couple things up front, I’ll pick the phone and call them
and try to get a feeling on their
buyer, where their buyer is.
Is it a relocation and they only have one day, you know, maybe just one week to work
or a few days to look and then they’re on their very last day and they’re
leaving that evening?
Well, that’s a lost different than someone who might be living here.
You know, what’s the buyer’s situation?
I’m trying to feel out where the buyer is encaged, where
they’re at and what they might pay.
And sometimes the real estate agent will just sing like a canary and tell you other things
and tell you everything.
The other thing I’m going to do is I’m
going to pick up the phone and if they have a lender, if they’re not paying cash, I’m
going to call the lender and I’m going to verify.
Now, the lender is not going to really tell me a lot on the
person, but I’m not calling for that reason, I’m calling to make sure this person is
actually qualified for the loan and where they are in the process.
And this is critically important, folks,
because the last thing you want to do is have your home off the market, possibly miss other
buyers buying it, then all of the sudden they have a 30-day or a 45-day loan commitment,
which they could string you along the way by the way, and they give you the 45-day or
30-day loan commitment in your homes than on the market the whole time.
Racking up days in
market.
It puts you in a far less of a negotiating position.
So your agent needs to do it with diligence, they need to know what to say to the lender.
And I’ll call up the lender and I’ll simply
ask the lender if it’s a Fannie Mae loan, I’ll say, did they meet Fannie Mae’s debt
to income ration?
Did they meet Fannie Mae’s depository?
Did they meet Fannie Mae’s criteria when it
comes to credit?
Are they a good buyer?
Tell me about the buyer, have you taken all their loan documentation and verified it or
have you just pulled their credit?
Have you put them through
the automated underwriting system with Fannie Mae?
You know, I get everything up front because I don’t want the home to come back on the
market because of financing, because I
didn’t do my due diligence.
So I’m going to call the lender.
So that’s one type of negotiation.
A lot of times I’ll get into negotiations after we agree to everything, so maybe during
the
inspection period.
But first of all, let me get back to contract negotiation.
It’s also very important for your real estate agent that you hire to really really know
what’s going on in the market
and in the subdivision.
They have to be very knowledgeable, because the good thing is right now is there’s a
lot of real estate agents right now out there that don’t do business, they’re just
not productive or they’re new and a lot of times you could just take advantage of
their lack of knowledge.
I mean, I hate to say it, but you know it’s really true.
You know, I do everything I
can to try to get my seller the highest price.
So now you go into the negotiation and you have to negotiate the inspection, they want
certain things fixed.
One thing I could say about
negotiation, you never want to go in and show your cards.
Okay?
I had a negotiation I was going thorough and my seller went back and he wanted me to tell
the other realtor what he
would do, what they would agree to.
And I said, let’s not do that, let’s put the ball in their court and have them tell
us what they would accept, because maybe they would accept a lower
price than what we would offer.
Well, to make a long story short, they did.
It was a 35-hundred-dollar difference on what we ended up agreeing to and my seller, I mean,
I can’t tell you how
excited he is right now and was.
I mean, and I told him, I said, look, at the end of the day, Shaun, we never want to go
in and tell them what we’re going to do first.
Let them talk first,
maybe they’ll get us a better offer.
So that’s the second thing, you always want to let them talk first and tell you what they’re
going to do.
So it’s a process, it’s not just going out there and
getting the offer and saying, hey, here’s the offer.
You’ve got to have your real estate agent.
Your real estate must pick up the phone, call the selling agent who presented the offer,
find out
information, call the lender.
Always look out for your best interest, always check everything out.
So let me give you a story and one I just closed recently.
We had a situation where we had
a home listed at 179.9.
We got an offer of 279.9, we got an offer at 275.
The appraiser went out there and it came in at 255.
The lender said, oh, this is great news, it came in low, the
seller is going to have to go down in price.
My seller and I were like, like heck we’re going to go down in price, that’s not happening.
So it’s worth the 275 all day long.
So what happened
is I called up the agent, the agent didn’t know what to do, he was sort of newer.
So I called up the lender and I said, look, this is a VA loan, we want you to appeal the
appraisal.
He said,
we’re not appealing it, our underwriters looked at it, it looked fine.
Well, I was just as mad as a hornet.
I called the seller, I, you know, detailed everything for the seller, you know, and what
went on, etcetera.
To make a long story short, I ended up getting the VA’s appraisal departments email and
I sent an extremely detailed, you know, email to them, but before I sent it to
them, I called the appraiser to give him an opportunity to change it and make it right
and he refused.
We got in a bit of an argument as you might imagine, so I sent everything to…
I got in
an argument with him because I basically thought he stole the buyer’s money.
And I got in a little bit of an argument with the lender, discussion I should say, because
I felt that they didn’t
care about the buyer, they didn’t care about the seller, they wouldn’t even appeal it.
So what I did is I sent everything in to VA very very detailed and two days later the
appraisal came in at
277, higher than purchased price and we just closed.
And why is that so important?
Because if that buyer didn’t buy the home, we already lost 45 days in the market and
the seller
wouldn’t have gotten that price again.
I knew this, the seller knew this, you know, because we just got shut.
And so someone had to go to bat and fight for the seller.
The seller really didn’t
know what to do.
The selling agent didn’t know what to do, the appraiser was a crook, the lender didn’t
give a crud about anybody.
Someone had to step in, step in for not only the buyer,
but step in for the seller and do the right thing, and we ended up getting the deal closed.
So it’s not just about negotiating up front, it’s negotiating all the way through.
And so hopefully
that gives you an idea of what your agent needs to do.
And this is why it’s so important, because he might not have sold the home for 275, quite
frankly it would’ve been lucky to get 270, if
that, because the home was on the market for quite a while.
So anyhow, I hope this helps.
Again, if you have any questions, please contact me.
I wish you the best of luck!
If you like
these videos, subscribe, share, give me a thumbs up.
Have a wonderful day, take care!