Page 25 - How To Buy A Home with Cat Stevens RVG

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Making An Offer (Continued)

Expect the house to sell above list price if…

■ There is a bidding war. We often times see that when a great house comes on the market at such a good price
that many buyers are interested in that house, and they all make offers at the same time. This happens most
frequently after open houses, where many buyers see the house simultaneously. In this situation, you might
not have a chance to counter-offer and negotiate, so make your best offer up front, list price or higher. If the
house is worth the money and you love it, you need to state your offer up front because you might not have a
second chance.
■ You ask the seller to pay closing costs. Some loans, like FHA loans, allow the seller to pay 6% of the sales
price for your closing costs, but after paying their own sales costs and loan payoff, they might be losing a lot
of money. You can negotiate a price above the list price that covers all costs. This is fairly common, and an
appraiser will tell the bank whether or not the house is worth the higher price.

Example Situation

Even though $100,000 is the list price, $98,000 is the seller’s bottom line.
They have to be able to sell the house and pay off their loan and seller closing costs.
If the buyer were paying their own closing costs and down payment, they could make an offer of $98,000.
But this buyer is a first time homebuyer with no money.
This buyer needs the seller to pay $3,000 towards buyer’s closing costs, so:
$3,000 is added to the $98,000 that the seller needs, making the final purchase price $101,000.

As long as other houses in the area are selling for similar prices, there is no problem. The seller sold the
house and got their bottom line. The buyer got the home they wanted and did not have to spend any
money on closing costs. Even though the buyer paid more than the list price, it’s a win-win situation.

And of course, the seller will always wonder if they could have held out for more money. And the buyer will
always wonder if they could have bought their home for a lower price. At the end of the day, the seller wants to
sell their house and the buyer wants to buy it. Your happiness is also worth a dollar amount. Don’t buy a house
that’s more expensive because it’s in the “right” neighborhood according to someone at the office. Be happy in
the house itself, every time you walk through your front door.

Keller Williams Realty Consultants - How to Buy a Home in Southern Indiana 23