Sellers typically prefer deals with fewer contingencies                               

By Dian Hymer
Inman News®

Negotiation strategies differ depending on how well the home is priced  and who's on the other side. If you're trying to buy a short-sale listing where  the lender has to agree to accept less than the amount owed, the seller doesn't  have much say in the negotiations about price unless he can contribute money to  pay down the loan amount.

Regardless of who you're dealing with, you're more likely to grab a  seller's or lender's attention if you are preapproved for the mortgage you'll  need and can provide verification of cash for the down payment and closing  costs.

Many buyers feel that cash is king. If buyers are willing and able to  pay all cash with no mortgage, no hassling with the lender and no appraisal  contingency, they feel they're owed a price concession.

Not all sellers agree. Some, who are confident in the value of their  home, would rather work with an offer from a well-qualified buyer who needs to  obtain a mortgage but who will pay a higher price.

Before you start negotiating, you should understand as much as you can  about the other party. For instance, if the sellers are moving to a retirement  home, they might go for the highest-priced offer in a multiple-offer situation,  even though it might not be ideal in other regards. If they are liquidating  their last asset, every penny will count.

An all-cash or large-cash-down buyer might not be able to negotiate a  'deal' based on the fact that no lender will be involved. But if the  home is a good value and suits your long-term needs, you might increase your  offer price and include a mortgage. This way, you conserve cash for other uses.

HOUSE HUNTING TIP: Many buyers don't want to negotiate. They want their  first offer to be their best offer. Usually, the only time this is effective is  if yours is the only offer, the house is priced right for the market, and you  offer full price. In this market, you're better off planning for some  negotiation, and not putting all your cards on the table at once.

In most areas, the home-sale market still favors buyers. A lot of  sellers are selling for less than they paid. Some have to bring money to the  closing. Sellers who have owned for years are selling for less than they would  have years ago. It's natural that they would want to try for the highest price  possible.

Negotiations are about more than price. Generally, the fewer the  contingencies or the cleaner the contract, the more attractive it will be to  the seller. Closing and possession dates can become issues at the bargaining  table. What's included and excluded, time periods to satisfy contingencies, and  virtually everything in the contract is negotiable.

Since everything is up for grabs, be clear about what's not negotiable  -- for instance, you can't go over a certain price. Show flexibility in areas  that will hopefully be valuable to the sellers, such as buying 'as  is' regarding some needed repairs.

Don't waste your time with sellers who are firm at a price that is considerably  over market value. Wait until they become realistic while you continue looking.  Some sellers eventually get tired of having their home listed and reduce the  price to market value. Others don't.

Sellers need to understand that buyers in today's market will walk away  from a negotiation if they feel they're not getting anywhere or are being  treated unfairly. Buyers could become suspicious or disappear if they're told  by the sellers or their agent that other buyers are lining up to make an offer  when they aren't.

THE CLOSING: A smart strategy is to defend your position while being  honest and fair with the other party.

Dian Hymer, a real  estate broker with more than 30 years' experience, is a nationally syndicated  real estate columnist and author of 'House Hunting: The Take-Along  Workbook for Home Buyers' and 'Starting Out, The Complete Home  Buyer's Guide.'