How To Negotiate a Sales Contract As A New Minnetonka Home Buyer

12/8/2010

 
After you have spent enough time doing all of the research with regards to your prospective real estate property and you're comfortable with working with the seller, then it is time to offer your price. But remember, the home buying offer isn't actually the end of the contract negotiation; you may be trying to agree on prices even after you have made an offer if the home owner refuses it, so you will definitely need a strategy to get the price you want - or at least close to it - well before you stretch your initial offer.

Having knowledge of just about all of the terms and conditions of the agreement and having a contingency plan are just a few ways to be sure you get the best price for your potential new house. The 'Consumer's Guide to Home Buying' by the Barron's series recommends to all potential home buyers to generate a checklist of things they can practice prior to the negotiation process occurs. Listed here are just a few items to consider as you start negotiating the price of your brand new real estate:

1.Who will be making the decisions in this sale?Who will be making the decisions in this sale, for all parties involved? Knowing the players benefits a skilled negotiator simply because this gives you an idea as to who influences the buy-and-sell negotiation. For example, is the seller working independently or is he/she working with an agent? Knowing who you are negotiating with helps you determine the most suitable approach for discussions as well as let you gauge the selling party's trustworthiness.

2. What's your back-up plan? If in the end, the seller still refuses your offer, do you still have other options? It can be quite frustrating not to get what you wanted from your negotiations, but you need to know when to back off and perhaps work towards another direction. Outline specifically the upper price limit that you might be ready to pay for the property and do not go past your limit only to win the price war.

3. Are you aware of the details of the sales agreement? It is very crucial to make sure you appreciate every term and condition of the sales agreement so you are not left with any surprises at closing. Make sure you review the contract and all the other details that go with it and note any item that you do not understand. Sit down with the seller or agent so that you can review everything that you don't think you completely understand so you don't have any hesitations that you may have on signing the contract in case your offer gets accepted.

4. Do you feel comfortable with your realtor? The real estate agent can give assistance and also professional advice concerning the entire process of negotiation for your home purchase, therefore it's crucial that you have confidence in them. You should spend an ample amount of time talking to them in order to create a positive relationship as well as discuss your thoughts about the property that you are about to purchase well before the negotiation commences so that you could make a decision based on facts.

5. Do you think you're ready to deal with any problems that may arise? Miscommunication with the seller's agent, hostility from the seller as well as other undesirable exchange of words which arise in the course of the sales process can definitely make it hard to negotiate fairly. Make sure you keep your cool and don't hesitate to say that you don't want to make the deal anymore in case you do not feel like it's going down the right path.

Author and Realtor Alexandria P. Anderson helps clients to find and purchase Minnetonka real estate as well as Minnetonka Homes in Minnesota.

Simple Tips For Beginning Minnetonka Homebuyers

4/13/2010

 
Experts explain what it takes first time homebuyers to keep the Minnetonka home buying experience as easy as possible and that is knowing what closing costs are.Some are not aware that closing costs are typically set at 15 percent of the sales price, and most lenders would require for them to be paid upfront. Achieving your goal of efficiently projecting your available funds and discussing your preferences in the arrangement of final price means being more prudent to identify them earlier, even if some lenders can roll them into the loan package.

Remember that the lender’s primary basis in the amount he presented to you is the sales price paid by the buyer and not necessarily the net price (or the sales price minus the closing costs). There are various ways in which closing costs are allocated and this may need the help of your realtor and lender if only to come up with the most agreeable plan for you to stay within your budget limit.

Having knowledge about the responsibilities of a buyer is the first prerequisite to understanding what closing costs are. As explained by Barron, the author of the book 'Smart Consumer's Guide to Home Buying', homebuyers must know that custom dictates allocation of closing costs and designates buyer and seller responsibilities, and not the law, as many believes it to be.

It is the buyer who typically settles all the fees and the loan’s the discount points. The lender, on the other hand, adds all these at the end of the contract (but may vary significantly according to the financial institution concerned). More often than not, bankers will treat this fee as a part of the contract or may be dispensed depending on the customer, but still you must figure out the exact estimated amount.

The buyer is also responsible in paying the premium of the homeowner's title insurance policy and has to ensure that this be settled before the purchasing begins. An extra cash in your hands will be useful when paying for the premium so that it won't get rolled into the loan. Note also how premium cost may vary from one insurance company to another. Make some research on the homeowners insurance policy rates or look around for more options before you decide to sign the contract right away. The seller has the following responsibilities or obligations.

Sales Commissions - refers to the fees allocated to the agent of both the buyer and the seller. However, these may depend upon the real estate agent you chose to work with.

Inspection Costs - pertains to the expense of having various inspections and those that are required for homes prior to purchase.

Title Insurance - are part of the homebuyer's obligations although many people misconstrue that title insurance is no longer covered in the costs that they have to settle. But, the closing costs also covers the title insurance costs, making it a responsibility of the seller.

When you know what closing costs are, you can have a better idea as to what your home's final price will be during the signing. In fact, in doing so, lenders can already provide you with information you needed earlier in the financing process such as the fees you will have to pay, the discount points, and everything else you need to know.

Author and Realtor Alexandria P. Anderson helps clients to find and purchase Minnetonka real estate as well as Minnetonka Homes in Minnesota.

How To Effectively Choose The Best Minnetonka Homes Mortgage

2/9/2010

 
First time home buyers often are befuddled when it comes to choosing the best mortgage package. In addition, there is no guarantee of getting your preferred mortgage loan even if you are working with a mortgage professional. First time homebuyers must not sign away the loan they qualified for but instead consider a smaller, more affordable loan.

This can be achieved when the basis set to qualify you is not your income ration and not exactly how much you are prepared to pay monthly. Borrowing the entire loan amount you qualified for can most probably exhaust your monthly resources which nobody would want to happen.

Being specific about the amount to be borrowed can spare you the possibility of having trouble with the payment terms offered by the loan officer. This can also help you adjust your housing expenditures based on your income. These are several ways to help you choose the best mortgage for your new home:

1. Consider the tax benefits. Some mortgages are 'interest only' loans which means you can deduct the entire payment on your taxes for that year. However, loans that are designed with a negative amortization scale won't allow you to deduct interest from your monthly payment.

2. Evaluate the long-term advantages. Whether you're planning to live in your home for 30 years and more or not, it is still advisable to know the pros and cons of your mortgage package. A fixed interest rate loan is somewhat higher in amount but unlike ARM and other loan products, it can safeguard you from changing market conditions. But a fixed interest loan also has its limitations. Smart Consumer's Guide to Home Buying's author, Barron, proposes that the fixed interest rate may increase your payments because of the demands of the escrow account linked with it.

3. Inquire about flexible payment options. Some home mortgage loans allow you to make extra payments towards the principal balance without paying a penalty, which means you can start paying down your mortgage when you have extra funds at your disposal. Find out if your loan products offer this type of flexibility so you can start paying down and be free of debt sooner than later.

4. Look for ways to keep payments low. Even when the lender offers you a large loan, consider cutting back on the loan amount so that you can keep the payments within an affordable range. A low interest rate, long loan term, and the ability to make interest-only payments are a few ways to keep payments as low as possible and within your budget range.

5. Avail yourself of mortgage insurance. Nowadays, majority of people do not have enough resources to pay for down payment. However your down payment can no longer be a problem since it can be provided by mortgage insurance and in some instances, you can even apply for your desired loan without making any kind of down payment.

Author: Alexandria P. Anderson is a MN real estate agent that specializes helping people to find and purchase Minnetonka real estate, as well as Minnetonka Homes for her realty clients.