From AskTara@Trulia

Reactions to the prospect of negotiating run the gamut, almost like a Rorschach of people’s comfort levels when it comes to thinking, talking and asserting themselves about money matters. Some people get so excited about haggling they adopt an entirely new persona when the time comes to talk their way into saving even a few bucks here or there. Others cringe at the mere thought of trying to suss out what’s going on in the minds of those on the other side of the bargaining table in order to strike a deal, even when hundreds of thousands of dollars (and their own best interests) are at stake.

And in light of the current market, it can seem like every real estate pundit you’ve ever seen on TV, the old guys from the Fed, Suze Orman, Jim Cramer – even the President! – have each pulled a chair up to the table and chimed into your transaction, too! Trying to factor market dynamics into your personal negotiation equation only ups the complexity factor (and the fear factor to boot).

When it comes to buying or selling your home, there is a handful of negotiation need-to-knows that can go a long way toward protecting your best interests – and your cash! Here are five essential negotiation need-to-knows for savvy home buyers and sellers:

1. Work from a foundation of sound information. It’s essential that you amass an arsenal of information, and use that as the basis for your negotiation. You are in no position to negotiate, aggressively or otherwise, unless and until you are well acquainted with the real estate market immediately surrounding your home, including:
what have similar homes recently sold for;
how much above or below asking do they normally sell for;
how long do homes stay on the market, on average, compared with the home you’re buying or selling?
Not only will your agent help you understand these numbers and how they should relate to your own offer or response, your agent is also in a good position to reach out to the other agent and collect any available information about what is important to the other party: do they care more about moving quickly, getting top dollar, or certainty that the other side can close the deal? The other agent isn’t obligated to divulge any information but often will, in the interest of facilitating a deal that addresses their client’s priorities.

Finally, it’s uber-critical to know what your own priorities are. Ultimately, the bar for whether your negotiation for your home is successful is based on what the home and the terms of the contract are worth to you. Know your own bottom and top line for price, and what your own priorities are, before the negotiation begins.

2. Approach the negotiation as a problem-solving challenge. Today’s negotiations are really more like problem solving scenarios, when you take into account all the parties whose needs must be met for the transaction to move forward. Traditionally, negotiations were a two-way power struggle between the buyer and seller, based primarily on their wants and their respective bargaining leverage. But on today’s market, the bank – or banks on both sides — often have their own guidelines and needs that impact the terms of the deal, whether it be the seller’s lender insisting on a certain price in a short sale, or the buyer’s lender and appraiser refusing to lend anything above a certain price.

Many a buyer has thought they were scoring a great deal by scoring a bargain basement price on a short sale, only to have the seller’s bank condition approval of the deal on a massive increase in the sale price. And the opposite is also true: a significant number of the deals that fall apart on today’s market do so because the home fails to appraise for the purchase price the buyer has agreed to pay. Ultimately, this is even the case when it comes to the buyer’s and seller’s needs: if the buyer can’t qualify for a high enough mortgage, or the seller can’t pay their mortgage balance off, at the price in the other party’s mind, there will be no deal, and the negotiation is inherently unsuccessful.

In this context, it’s more important than ever to approach your negotiation as an exercise in problem solving, with the aim of meeting the needs of as many parties involved as possible. If you get some of your wants met, too, you’re golden!

3. Manage your own mindset. You probably shouldn’t even try to buy a home that you don’t strongly like, or even love. It often makes sense to hone in on a specific offer price (within the range what is reasonable for a home) based on how much you want it, or how much you’d hate to lose it – especially in a multiple offer situation, where you may only have one chance to make an offer.

With that said, be aware that when it comes to negotiating, she who is the least emotionally attached to a particular outcome usually has the greater bargaining power. The more attached you are to a particular home or a particular price point or set of terms for your home, the more likely you are to panic, freak out, throw money at the situation or cave in on important points unnecessarily when you get even the faintest sense that your desires may be at risk.

When it comes to managing your own mindset and stamina through the course of a negotiation (uncertainty is tiring!), knowing what is and what isn’t within each party’s – control is key. Your agent can help you stay clear on this, which will help you avoid the emotional exhaustion that results from trying to negotiate things that are not really negotiable (e.g., the bank’s bottom line, cosmetic repairs on most foreclosures, etc.). On the flip side, knowing the full range of items that can be negotiated – which extends beyond price into areas like deposit amount, length of escrow, seller repairs, and whether the property is to be taken in as-is condition – empowers you to maximize how compelling your offer is to the other side, given the resources at your disposal.

4. Minimize time pressures. Over the years, I have seen many a buyer and seller make brow-raisingly questionable offers and counteroffers based solely on the fact that they have to move by a certain deadline. Because shelter is a basic human need, the prospect of having to move out, relocating to a new job or moving to a new town without having housing in place can cause even the most nimble among us to feel ungrounded.

Problem is, in the context of buying a home, moving deadlines can cost you thousands and thousands of dollars – and can even cause you to make needless compromises in terms of the actual property itself: compromises you might later (deeply) regret. If you are approaching a deadline for moving out or relocating, you’d do better to find a rental housing situation that will work for awhile or will work as a Plan B than to try to hurry your home’s purchase or sale to meet the deadline.

5. Act and react quickly – not impulsively. When you find ‘your’ place, make an offer. When you get an offer or counteroffer), respond to it. In real estate, time is always of the essence, and prolonged hesitation often results in lost opportunities. There’s nothing wrong with sleeping on a decision overnight, especially if the ‘right’ move is unclear. But you never know when another buyer or another property might show up on the scene and change the whole bargaining dynamic, costing you more money or wooing away your home’s buyer.

This is why it’s so important to be clear on the market data, your own budget and your own top and bottom lines from the start, so that you are positioned to act quickly, strategically and intelligently when the circumstances require it.
From AskTara@Trulia

Buyers, sellers and agents: what negotiation insights have you gleaned from your own real estate experiences?

I want to share this as I found this to be very interesting and informative for my buyers and sellers.

Written by AskTara@Trulia

In the wild world of dating, when you encounter a “turn-off,” you can just pack it in and not to go on another date with that guy or gal again. But turnoffs can be much more detrimental when they come up in the realm of your real estate goals. Indeed, turn a buyer off, dear sellers, and you risk not selling your home – period – or getting a lower price than you might have otherwise.

And, contrary to what you might assume, the same goes for buyers. Even in today’s ‘buyer’s markets,’ multiple offers do happen. And even in cases when you’re the only buyer on the scene, having a cooperative seller goes a long way toward everything from getting access to the place for inspections to getting a price reduction when the appraisal comes in low. Thus, the potential still exists for buyers to turn sellers off, and risk having their dream home slip right through their fingers.

As you proceed on your quest for drama-free real estate, factor in these frequently occurring gaffes that turn off buyers and sellers, and my tips for avoiding them.

Top 3 Ways to Turn a Buyer Off:  If you’re a seller courting buyers, here are 3 faux-pas to avoid:

1. Hanging out when buyers are viewing your home: Buyers stalk properties online and off, checking obsessively for price reductions and the like.  But buyer-side home stalking is unobtrusive to sellers. On the other hand, buyers can feel personally stalked and stifled in their ability to fully explore or verbally process their impressions of a home when you, seller, hang out inside your home while it’s being shown.

As soon as a buyer sees you in the house, it instantly becomes much more difficult for them to”
(a) envision themselves living there (it’s your house, after all),
(b) be comfortable opening up drawers, closet doors, etc., and
(c) express their thoughts about how this house might be exactly what they’re looking for, if they can knock out that wall and get rid of those cukoo murals you so lovingly painted in your children’s rooms.

Sellers: If you want to sell your home, it’s best to not be around when buyers are looking. Give them some breathing space and a chance to truly walk around and consider what they like and/or dislike about your home without lurking and looming (and, let’s be real – eavesdropping) nearby.

2. Showing a messy house: Life gets hectic, and it’s easy for things like laundry, dishes and other house cleaning tasks to fall by the wayside. It’s also difficult to keep the home in which you and your 4 kids, 3 gerbils and 2 Labrador Retrievers live perfectly spotless for months at a time, while you’re waiting for an offer. But when you decide that you’re going to sell your home, it’s imperative that you make a pact and a plan with yourself and your family that the place will be in tip-top shape when buyers come knocking.

Remember: your home is competing with dozens of others, as well as with buyer’s HGTV-infused visions of what their next home should look like, so first impressions really count.

Sellers: Stuffing the closet is not the answer. (Buyers will be opening that closet door, after all.) Pack up your personals like you were moving (best case: you are), and put all but the essentials in storage, if needed. Get the carpets cleaned, do the dishes, make the beds, mow the lawn, dust, sweep and mop. Ask your agent to give you a gut check on whether your idea of clean is clean enough (better yet – ask them for the number of a house cleaner who you can engage to get the job done to showable standards).

This might all seem obvious, but agents and buyers alike are constantly amazed at the condition of some of the homes they walk into. Take my word for it; I’ll spare you the ‘ewww’-inducing stories.

3. Overpricing your home: Buyers already have lots to do before making the largest purchase of their lives. They have to wrangle their finances into order, jump hoops to qualify for a loan, collect the cash for down payment and closing costs, and invest sometimes hundreds of hours into market research and house hunting. With all of this already on their plates, the prospect of trying to negotiate down a crazily high asking price is just too much work (and too outside their comfort zones) for most buyers to deal with. The average buyer won’t even bother looking at your home if the asking price is clearly high and off base compared with other similar, nearby homes for sale; they’d rather sit tight and wait .

Sellers: Price to sell from the beginning. Work with your agent to determine a price that is supported by the data on how much nearby homes have recently sold for. You’ll save yourself a lot of time and anguish and get a lot more legitimate bites from serious, qualified buyers.

Top 3 Ways to Turn a Seller Off:  Buyers, if you want a home’s seller to play ball, best practice is to avoid these 3 pitfalls:

1. Unjustified, extreme lowball offers: It’s no secret that buyers have the upper hand in many markets right now. (To be clear, I said ‘many’ – not ‘every’ – your agent can help you understand what the dynamics are in your market.) But let’s be realistic, here. No seller can afford to give away their home at a price far below what it’s worth on today’s market. Lowballing a seller at a price far below the recent sales prices of similar homes in the neighborhood on the ‘let’s-take-a-stab’ plan, is highly likely to turn them off.  And that, in turn, will cause the seller to view your offer – and you – as disrespectful and wasteful of their time.

Not only will they turn down your offer, but they may not even bother with a counteroffer, rendering your efforts at securing that particular home dead in the water.

Buyers: Review the recent sale prices of similar homes in the neighborhood (aka “comps”) with your agent before you make your offer. Also, ask them to help you factor in other market data, like the average list price-to-sale price ratio and the average number of days neighborhood homes stay on the market. It’s all right to come in lower than asking, if the market data supports such an offer; just be sure your offer is based on reality – and not your fantastical hallucination about scoring the bargain of the millennium.

2. Buyer-side mortgage fails: Plenty of employed buyers with decent credit and cash in the bank have been turned down for a mortgage these past few years. That means buyers can’t assume (a) that they’ll be approved for the amount of loan they need to buy the house they want, or (b) that they’ll be approved for a loan at all. Your inability to get approved for a home loan can create all sorts of problems not just for you, but also for your home’s seller. The average seller’s  worst case scenario is that  they accept your offer only to find out a few weeks, or months, later that you can’t get the loan you need to close the deal.

Buyers: It’s not overkill to start working with a mortgage professional as far as six months or a year in advance of starting your house hunt to get pre-approved for a loan. Make sure you get a clear understanding of the amount you qualify for, then work with your real estate agent from there to determine the price range you should house hunt in. And whatever you do – don’t buy a new car, open new credit cards or even change your line of work before your escrow closes, unless you consult closely with your mortgage professional before you make that move.

Tip for Sellers: Work with your agent to vet buyers before you sign a contract. Factor in their down payment and earnest money deposit, and feel free to counteroffer these items, not just the offer price. It’s not overkill to have your agent contact the buyer’s mortgage broker to see how reliable the buyer’s pre-approval really is.

3. Bashing the seller’s home: Home bashing happens when buyers start bad-mouthing (aka “trash talking”) the place and/or the neighborhood in hopes of getting a lower asking price. Examples: pointing out all the foreclosures in the area, saying the house down the street just sold for much lower than the asking price on this house, saying you’ll need to rip out the entire kitchen before you even consider moving in – saying any of these things to a seller who happens to be at home during the showing or the inspection is probably one of the fastest ways to turn them all the way off.

Buyers: Bad-mouthing a house or neighborhood won’t work to get you a lower price. Instead, it only serves to irritate the seller and motivate them to come up with all sorts of reasons why they shouldn’t sell their home to you! Remember: homes hold incredible emotional experiences for owners. Make an offer you’re comfortable with and keep the negative comments to yourself.

If there are legitimate, factual reasons underlying your decision to make an offer at a price the seller might see as a lowball, ask your agent to respectfully communicate those facts to the seller’s agent.

Are the holidays a good time for selling your home? According to a survey by Realtor.com, they are. An article from the National Association of Realtors says more than three-quarters of Realtors report that serious buyers come forward during the holidays. That’s a mainland statistic, so whether that translates to island buyers is up for interpretation. But, year in and year out, the high season of November through April hosts exponentially more people in the Virgin Islands than any other time of the year. And many of them are eager to take the step that so many of us have taken and make this world their own.

The cold weather is a huge motivator. And for folks who have visited the Caribbean before and who find themselves returning again and again, it’s often not just about vacationing. It turns into a serious notion. They call a Realtor because now they want to see the interior world – not just the beaches and resorts, but the lifestyle.

When I greet families on the cusp of deciding to move here, it’s not simply about showing them homes, it’s about acclimating them to the lifestyle. My home tour includes a built-in lunch break at a strategic location. Often, it’s someplace on or near the beach. Or, depending on the customer, it could be someplace a bit more upscale, that assures them that the world they’re leaving behind won’t vanish here in the islands. I’ll plan a stop where the food is great and the restaurant is a place that isn’t all about burgers and umbrella drinks. We’ll make a quick swing by a good grocery store, then down through Tutu and our movie theater and mall – look, an Office Max, a Home Depot! – all of which tells folks that this is a very familiar world. Did I mention McDonalds?

If you’re thinking about selling, now is a good time to get started. But be prepared to keep your home in show condition, even during the holidays. It’s not an easy time to do that, but if there’s a time that make sense to sell, it may well be now.

As a real estate agent, I deal with an assortment of people with different needs.  And very different pocketbooks.  So, if you’re looking to rent a property, it’s important to understand that there is no shame when it comes to what you can or cannot afford.  Looking at properties that dazzle you, only to learn you can’t really afford them, makes what you can afford disappointing, and often unnecessarily so.  Just be forthright with your Realtor and you’ll save yourself and your agent time and frustration.  Keep in mind when shopping for rentals that most do not include utilities, and utility costs are very expensive in the Virgin Islands.  We all love a cooled down home in the tropic heat, but AC doesn’t come cheaply.  So, factor in your electric costs, and keep in mind that most landlords typically ask for the equivalent of three months rent – first, last and a one-month security deposit – in order to sign a lease. In this market, rent can often be negotiated, so ask your Realtor to help with that.  And if you know you can’t afford first, last and security to rent a place, let your Realtor know right away.  That’s not the kind of thing you want to negotiate at the last minute. It’s always helpful for your Realtor to know from the start what your finances are, and he or she can then advocate for you, rather than try to offer excuses at the last minute.  More than anything, a landlord wants someone who can pay each month and take care of the property. If you can do that, but are on a limited budget, there’s hope!

The old adage in real estate has long been that investments in updating kitchens and bathrooms will be covered at the closing table, and then some. But, a recent New York Times article from the real estate section argues that times have changed. These days, more and more sellers are being encouraged to invest in updates that don’t really justify an increased list price and which won’t see a return at the closing table, but which will at least bring them offers. Buyers have a lot to choose from, and many don’t have the confidence or inclination to do renovations themselves. They want the full deal – homes with both the kitchen and bathrooms modernized. I had buyers turn their nose up at a beautiful home I had listed in a very prestigious part of St. Thomas. Their only complaint – a dated kitchen. Bathrooms were spectacular, but that just wasn’t enough, and they weren’t enticed by the notion of putting their own mark on a new kitchen. They wanted jazz and convenience, and they wanted it at a great price. So…if you’re a seller, consider renovating, or make sure your list price reflects the buying power of prospective homeowners who are willing to look and look until they get the deal they want.