Emily Flax

Negotiating an offer can be very stressful for both buyers and sellers. Although a real estate transaction is a business deal, it is very often driven by high emotions of all those involved. Keep in mind that buyers and sellers have the same goal in negotiating an offer. Both parties ultimately want the deal to come together. Here are some helpful negotiation tips for buyers and sellers:

1. Cooperation: Throughout the entire process, both parties need to work together to reach the finish line. Toward that end, keep the lines of communication open and positive. Make a point to find out what the important issues are for the other person, and respect the other party’s needs. Being combative can slow or halt the process.

1. Price: Both buyers and sellers have access to comparable sales figures. Sellers, price your property competitively to attract offers. Buyers, if you see that property is priced fairly, let your offer reflect that knowledge. Making an offer that is far less than the asking price only serves to alienate the seller, especially if you are aware that the asking price is in line with comparable sales.

1. Compromise: You may not get everything you want, but neither will the other party. If each side gives, then each side will have a win. Remember to keep your emotions in check. Feel good about your wins and don’t dwell on the things you had to give on. If there are issues on which you simply cannot agree, think about meeting in the middle and splitting the cost of whatever repair you are stuck on.

1. Keep it simple: Try not to complicate the transaction with items external to the property, like furnishings and fixtures. If the basics of the deal work for both parties, don’t derail the process with issues of minor importance.

1. Ask your broker for advice: Chances are that he or she has encountered stumbling points like yours in previous transactions and can share relevant insights with you. Experienced brokers know how to bring buyers and sellers together, and can guide you through most obstacles.
   

Following is a review of Truro’s final sales figures from MLS along with a comparative analysis of this year in relation to the prior two years. Our data comes from the Multiple Listing Service and does not include private sales. The vast majority of sales that occur in this market are MLS sales.

There were 74 properties sold in Truro in 2008 with a total sales volume of $42,903,850.
There were 61 properties sold in Truro in 2007 with a total sales volume of $36,974,833.
There were 56 properties sold in Truro in 2006 with a total sales volume of $37,325,075.

Table 1: Number of Properties sold with Median Sale prices.
The median reflects the sales price that is exactly in the middle of all the figures for that category. For example, if 26 properties sold, 13 were priced above the median, and 13 were priced below the median.

Table 2: Average Days on Market of Sold Properties

Table 3: Percentage of Sale Price to List Price

Highs and Lows

The lowest priced condominium property to sell this year was a unit located at 82 Shore Road which sold for $126,000. The unit, located at Salt Air Condominiums, is seasonal and has 806 SF. The lowest priced single family was located at 9 Highland Road and sold for $360,000. It is a 3BR/2BA home with approximately 1500 SF and an in-ground pool.

The highest priced condominium to sell was a seasonal cottage located at Roseville Condo on Corn Hill Beach. The 820 SF cottage with 3BR/1BA sold for $425,000. The highest priced single family home to sell was a contemporary home located high on a bluff at 20 Great Hills Road. The property consists of 4 BR, 3.5 BA, with 4650 SF and has panoramic water views.

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The year-end numbers are in. Over the next three weeks, we will review the final sales figures from MLS along with a comparative analysis of this year in relation to the prior two years. We’ll start with Provincetown this week, and we’ll look at Truro and Wellfleet in the coming weeks.

Our data comes from the Multiple Listing Service and does not include private sales. The vast majority of sales that occur in this market are MLS sales.

There were 151 properties sold in Provincetown in 2008 with a total sales volume of $88,098,251.*
There were 165 properties sold in Provincetown in 2007 with a total sales volume of $85,902,800.
There were 158 properties sold in Provincetown in 2006 with a total sales volume of $82,653,453.

* Sales figures exclude timeshare properties.

Table 1: Number of Properties sold with Median Sale prices
The median reflects the sales price that is exactly in the middle of all the figures for that category. For example, if 26 properties sold, 13 were priced above the median, and 13 were priced below the median.

Table 2: Average Days on Market of Sold Properties

Table 3: Percentage of Sale Price to List Price

Highs and Lows

The lowest priced residential property to sell this year was a studio condominium located at 962 Commercial Street at the Last Unicorn Condominiums in the East End. The unit has 190 SF and sold for $130,000.

The highest priced property to sell was the Murchison Estate located at 2 Commercial Street in the West End. The property is a landmark in Provincetown, with the main residence having been developed under the supervision of Walter Gropius and associates and completed in 1957. The estate consists of 3 buildings and a pool on 3.5 acres. It sold for $6,550,000. As of this writing, the word is that the new owners have plans to develop the property into 9 building lots.

Knowledge is power when it comes to knowing your credit scores. If you are contemplating a purchase, it's a great idea to know your full credit picture before you apply for a mortgage. By planning ahead, you can be proactive about positioning yourself to get the best interest rates.

Borrowers with the highest FICO scores (760-850) can expect to be offered lower interest rates and more loan choices. On the other end of the spectrum, a FICO score of 500-520 is usually the minimum required to even apply for a mortgage.

Several months prior to applying for a mortgage, we recommend obtaining a copy of your FICO score through www.myfico.com. Also, in accordance with the Fair and Accurate Credit Transactions Act (FACT Act), you are entitled to one free copy per year of your report from each of the three credit bureaus (Equifax, Experian and TransUnion). Find out more by going to www.annualcreditreport.com.

There may be errors on your credit report pertaining a missed payment or pertaining to your history that could take a few months to clear up. You can also work to improve your credit score by paying off outstanding balances. One bit of advice: don't close out any of those credit card accounts once you have paid them off. In some cases, this can hurt your credit score.

By taking the initiative to improve and maximize your credit profile well ahead of time, you can move forward with confidence once you find your dream home. AND, you stand to save a significant amount of money over the term of your loan by qualifying for the lower interest rate.

Q. Recently, I lost out on a house in a multiple bid situation. When I found out there was another offer, I freaked out. What advice can you offer me for the future, in case this happens again?

A. Multiple bid situations are tricky. Sellers who receive more than one offer have several options: they can accept the best offer, they may counter one offer while putting the others aside, they can ask all parties to submit their ‘highest and best’ offer, or they can negotiate one offer while rejecting the others. They can even disclose the amount of one offer to the other buyers in the hopes of getting the price up (Although this is not a common practice in the Cape Cod market, it is routinely practiced in other markets).

Being a buyer in this situation can be frustrating. Keep in mind that the amount of your offer is only one part of the offer package. Oftentimes, other terms like the closing date or financing contingencies, can carry as much weight for the seller as the amount of your offer. If two offers are the same amount, but one is offering cash while the other is dependent on financing, the seller may opt for the cash offer so as to ensure a more expedient closing. Try to keep your terms as simple and ‘clean’ as possible.

It is important that you try to remain as unemotional as possible when you make an offer. Study the comps and decide ahead of time what price you would go to and stick to it. Don’t let the competitive bid scenario cause you to offer an amount outside your comfort zone. By the same token, when you are in a multiple bid situation, don’t waste time getting to that number. I have seen buyers lose out on properties because they did not go right to their ‘highest and best.’

You may feel that the seller has all the power in these negotiations but remember this: you are always in the driver’s seat when it comes to spending your money. Keep in mind that inventory is high these days, and if you miss out on your #1 choice, it is likely that another property will come along that meets your needs.