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October 8, 2008
cold feet? entering contract-negotiating?
Hi folks,
I am about to enter a contract for a 2family in prime williamsburg. No brownstone, but no renovation either. He accepted my low (not low for me) offer the first day the market tanked last week. As it has gotten worse, I am starting to get nervous. Haven't signed anything yet, am thinking about negotiating further with a few big ticket items found on the inspection. Any tips? The last time I bought the market was strong and no one could negotiate anything in Williamsburg. Thanks guys.
Comments
"He accepted my low (not low for me) offer the first day the market tanked last week"
That's the first tip off!
"Haven't signed anything yet, am thinking about negotiating further with a few big ticket items found on the inspection. Any tips?"
RUN AWAY RUN AWAY!!!
http://www.youtube.com/watch?v=XcxKIJTb3Hg
Holy Grail - Killer Bunny
The What
Someday this war is gonna end...
Posted by: what at October 8, 2008 12:59 PM
I would definitely re-negotiate. In this market you should have a lot of leverage, especially if there are problems with the property. If he says no, prices should start to drop and you can shop around. How low was the offer? How badly do you want the property?
Posted by: Garp at October 8, 2008 1:01 PM
The offer was 300k lower than the asking price, but the asking price was seriously not grounded in reality or recent comps so I basically just ignored it and made offers that seemed reasonable for the area. I want the property but this last week has scared the hell out of me. I am not good at bargaining, but this may be my big opportunity. I'd like a new water main, a new roof and the tenants out by closing. Right now there are leases until March 31st, however the seller is taking some tenants with him to a new building but this is verbal so far. We are waiting for the first draft of the contract to arrive.
Posted by: bqe1970 at October 8, 2008 1:14 PM
bqe1970 I know you want a house, who doesn't? At this time the whole financial universe is collapsing into the black hole. Why do you want to be in such a position? When you get the contract give yourself a few day to think it over, good luck.
The What
Someday this war is gonna end...
Posted by: what at October 8, 2008 1:27 PM
If there are real structural issues uncovered in the inspection you may have grounds to ask for a reduction in price. I got a new water main put into my recently purchased house as well as a new water meter. Roof might be a hard sell but why not try? All they can say is no and then you can say you are going to walk which might make them say yes.
Posted by: wasder at October 8, 2008 1:29 PM
No real structural issues. As always there are a bunch of small stuff, $200-500 here and there. A new roof would cost $3000-5k and a new water main at least 3k so those are the 2 big ones I'd focus on.
Posted by: bqe1970 at October 8, 2008 1:51 PM
As you haven't signed a contract yet, you are in a very strong position as you can still walk away. You should definitely try to drive a hard bargain. That said, if you need finance, you might want to double check on that first, banks have certainly tightened up their lending requirements, we won't be seeing any 80/10/10 financing for a long time to come. However, if you have a decent down payment and a secure job, you should be able to find a mortgage, oh and a credit score higher than 740.
Posted by: bohuma at October 8, 2008 2:01 PM
You are not in contract. An accepted offer means nothing and is not binding. You can renegotiate pricem as well as demand all of the things you mentioned. I would do both and would bargain really hard. If you have a broker, have the broker handle the negotiation.
Posted by: mkop at October 8, 2008 2:15 PM
Is this home going to be your primary residence or investment? If this is the home you plan to live in then you should do an analysis comparing your current housing payment. Also you have a 2nd unit so find out what market rent you will be able to receive and how likely it is to rent and how soon. Have you already qualified for a mortgage? Everything now is negotiable and re-negotiable. sunny_hong@countrywide.com
Posted by: shong1 at October 8, 2008 3:31 PM
Regarding renegotiations: DEFINITELY try for something, but don't piss them off with the little stuff, mention it, move on and focus on big(ger) ticket items. That way you look good, but also savvy.
They might not want to make a concession on price...however, they might be able to make some sort of contribution towards your closing costs, etc. You should also check to see what the property last changed hands for.
Talk about scary! Imagining coming to a deal on the day the market tanks. Yikes. But if you like the place, feel the offer is reasonable in the long run, and you don't anticipate (but who does?) being out of a job, I say, go for it! Otherwise, walk. I did it some years ago, and don't regret it.
Posted by: Minmin at October 8, 2008 4:55 PM
hire the what to renegotiate on your behalf. they might pay you to take it away.
Posted by: slick at October 8, 2008 5:33 PM
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