Gary McNinch Realtor Renton WA Real Estate

A Buyer asked the following question on a real estate question board for the general public:

appraisal price came back $6K less than agreed to price. seller was paying half our closing costs. i dont think i should pay anything more or pay the closing costs he agreed to pay now. we will pay the appraisal price and still expect the sellar to pay his agreed to closing cost contribution. can we ask the sellars agent or the bank to pick this portion of the closing costs if he flat out refuses. any advice ?

This is likely to happen more often as the market values trend down and pricing is behind market values.

I had a couple of questions before giving an answer?

1) Why don't you ask your agent? Did you make the mistake of trying to buy a house unrepresented?

2) How come the offer is more than appraisal? A good agent would have been able to get you a purchase price under the appraisal price in this market.

My answer to the anonymous buyer:

This is a great question to ask your Realtor. If you used the standard MLS contracts, receiving an appraisal less than purchase price reopens the negotiations in several ways. It also allows you to cancel the transaction without penalty. Have your agent explain all the options to you. You can ask for any of those options, but you need a negotiation expert to get everyone to come together. Did your agent discuss this possibilty and various options when you first signed the purchase and sale agreement?

You, as the buyer, may not want to pay any more than the appraised price and your lender will not lend you more. The seller may want you to make up the difference since they already are giving you money for costs. The agents (provided you didn't try and do this yourself) will try and get this to closing if that is what is in the best interest of each client. The lender will want it to close because they have already done work and spent money to get this far. Do not expect the bank to offer the $6,000.

Under your scenario the seller will end up with $6K less in their pocket at closing. They may be willing to let your offer go away, put the home back on the market or take it off the market altogether. With only a $6K difference you should all be able to come to mutual agreement especially if you are serious about buying and the sellers are serious about selling. It will be necessary for there to be some give and take on everyone's part.

Good luck getting this together.

Gary McNinch holds the industry designation of Certified Negotiation Expert. Our job is to represent our clients strongly, anticipate situations and options and plan negotiation strategies. The question above highlights the importance of having successful veteran negotiators.

Explaining What The Federal Reserve Did In Plain English (April 30 2009 Edition)

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today within its target range of 0.000-0.250 percent. The Fed also reiterated its plan to support the mortgage market to the tune of $1.5 trillion.

In its press release, the FOMC noted that the economy may still be contracting, but that it's not happening with the same speed as in prior months. Household spending is stabilizing and financial markets are "easing". Since the FOMC was a year late to realize our economy was in a recession, I am hoping they are actually late in noting the "easing" and that they are in fact accurate.

Nevertheless, threats to the recovery are everywhere with the following items on the Fed's short list:

• The growing ranks of unemployed workers
• The reduction of housing wealth nationally
• Reduced inventories and investment from business

Furthermore, the FOMC fingered today's inflation levels as too low to support economic growth. This justifies the Fed's plan to hold the Fed Funds Rate near zero percent "for an extended period".

For home buyers and refinancing homeowners, today's press release was not favorable.

After the Fed's announcement, stock markets rallied on the idea that the worst of the economy really is over and that led to a broad bond market sell-off. Mortgage rates spiked in response, adding as much as 0.125 percent, in some cases. And as we have said, "now is the time to purchase a Renton home or Kennydale townhome." I don't foresee interest rates going much lower than the historical lows they are pushing.

Source Parsing the Fed Statement The Wall Street Journal Online http://online.wsj.com/public/resources/documents/info-fedparse0904.html

Don't Lump Your Renton Real Estate Research With The 128,203,000 Other Homes In America

National real estate data helps economists identify trends in the housing market. It shapes policy and influences markets.

For active home buyers and home sellers, though, national real estate data is irrevelant. This is because national data says nothing for the factors determining home prices in any given zip code.

See, national real estate news is mash-up of data. It's 128,203,000 homes from all 50 states. Each of these states has its own economy and there are different factors that drive home values in each

Most Americans understand this.

But, if we dig deeper, we see that within those states, there are more than 19,000 incorporated cities -- plus thousands of unincorporated ones. And like the 50 states, city-to-city home values vary by economy, too.

Furthermore, each city is comprised of areas, and those areas can be broken down into neighborhoods and then sub-divided again into streets, with blocks.

It's apparent that a random home in Alabama can't be compared to a random home in California. Yet, that comparison is exactly what you're getting with national real estate data and why we can't rely on it to say "values are up" or "values are down".

Values depend on what's happening locally.

For buyers and sellers, the underlying goal is to meet at "the right price". To reach that sort of price discovery, you have to look local.

It's not as easy as it sounds.

Local real estate trends is a topic that's too narrow to be covered by the national press. It's even too narrow for local papers. Therefore, buyers and sellers have two places to turn:

1. A general Renton real estate website (RentonHomefinder.com)
2. A practicing Renton real estate agent (The Gary McNinch Team)

Using both sources for local data is common among today's buyers and sellers.

National real estate news offers little value with respect to home price negotiation. Because all real estate is local, your real estate data should be, too. Give the Gary McNinch Team a call or use our map search of Renton Homes and Townhomes for Sale to start your search. There are huge differences between communities and neighborhoods and we have been inside homes and condos in most all of them.