Negotiation Tricks of the Trade
When you’re submitting an offer on a home, research and due diligence are key. “It’s a lot of research,” says Mathew Ngo with Century 21 All Islands. “It’s not just about submitting an offer and seeing if the seller is willing to accept, it goes beyond that.”
• Have your realtor find out everything he or she can about the neighborhood and/or condominium building, property history and its seller. “Everything that is discovered could be a material fact that could influence the selling price,” says Ngo. For example, if you find out that the seller has a mortgage of $450,000 and the house is listed at $425,000, then you know there isn’t much room to negotiate because the seller isn’t going to have enough money to pay closing costs. Alternatively, if you’re buying a condo, check to see if there are any distressed properties in the building, an announcement of maintenance fee increases or any special assessment fees, all of which should factor into your offer price.
• While the maintenance history of the property will be disclosed, it doesn’t hurt to dig up as much as you can upfront about any major repairs. For single-family homes, Ngo recommends the City & County of Honolulu Department of Planning and Permitting website, which lists all of the building permits for a particular address.
• Your realtor should know the market condition—what has sold recently and for how much and is there any competing inventory. “Obviously you don’t want to submit a low-ball offer if there’s nothing else on the market or nothing else has sold in that market recently,” says Ngo.
• It may sound odd, as it’s generally something you do to get a job, but submitting a cover letter, says Ngo, can give buyers a slight edge during the negotiation process, particularly if they’re going to be the home’s primary occupants. “I like to include a cover letter to give the seller an idea of what type of buyers they are,” he says. “It paints a picture. You want to get the seller to relate on an emotional level with the buyers.”
Here are a few additional websites that are handy for researching properties:
• The Hawaii State Condo Guide lists all the particulars of condo buildings across the islands.
• Enter the address of the home and the National Flood Insurance Program Flood Hazard Assessment Tool will tell you its flood designation. “It’s important because flood insurance rates are going up,” says Ngo.
• For tax info and sales history, check out the City & County of Honolulu Real Property Assessment and Tax Billing.
• Search crime stats in your prospective neighborhood through the Honolulu Police Department’s revamped Crime Mapping tool.
• Perhaps the best tool of all, says Ngo, is Google Maps’ street view, which allows out-of-state buyers to cruise the neighborhood from the comfort of their desk chair.
Posted on Monday, January 10, 2011 in Permalink