I put in an offer on a condo for my buyer. Asking price was $98,888 with $1,000 closing cost credit. We offered $92,000 with $1,000 closing cost credit. Counter offer came back at $96,000 and no closing cost credit. Listing agent said he thought we could close the deal if we came back at full or even over asking price and asked for full closing cost credit.

I am waiting to hear from my own circle (broker, mortgage advisor, etc.) but wanted to put it out here for feedback. My buyer does not want to pay more than $95,000, to include any closing cost credit.

So, if we countered back at $98,888 with $3,888 closing cost credit, which is better, this or $96,000 with $1,000 closing cost credit. Will the first scenario allow my buyer to "buy down the rate"? What are the pros and cons to the two scenarios? And, does anyone have any other suggestions for a counter offer.

TIA,
bella

If your clients is looking for low monthly payments, perhaps buying down the rate will be a great way to go.

Will the client be living in the property for more than 5 years? Does the higher purchase price make much of a tax implication?

What are your clients goals with the transaction? Are they just trying to play the negotiatin game or do they have a valid reason why they do not want to go over a certain price?

Good luck,

Thanks, Fastrax. My buyer is fixating on her payments, more than anything else. We ended up going with $98,888 with 3% back. This gives us $96,000, which the buyer and seller can live with. And allows us to buy down the rate. I'm hoping to get a phone call soon to let me know it's been accepted.

I do find it sad that I thought I could get some good solid advice from some apparently seasoned professionals on this board, and only Fastrax was good enough to reply.

Notice, though, that a certain "agent" brings up a totally insane topic, in my opinion only to stir up the pot and get some much craved attention, and that post gets 66 replies. I guess people here aren't as inclined to truly share their knowledge and help to educate those of us seeking genuine feedback.

Either scenario doesn't matter for the seller. Since it only makes a difference to the buyer, you should go with the "$98,888 with $3,888 closing cost credit" and have your buyer use that extra money to buy down the rate/closing costs.

You could also try to see if your buyer can come up to a little bit more of a number that's negligible. For example, reaching a net number of $95,500.00. I mean $500.00, that's a small enough amount for both the seller and buyer to just say "forget it and let's get this deal done".

Worst case scenario, you and the listing agent could also see if you both would be willing to chip in $250.00/each of your own commission to bridge the difference in pricing gap.

I've had to do this some times when it comes to buyers or sellers who are standing firm on their ground and no one wants to budge. Additionally, you can also remind your buyer that the amount that they're trying to save is a small price to pay for something that they know they're going to love to live in (if they're already emotionally fallen in love with the house). Besides, right now it's a soft market, but you want to remind your buyer of the long term rewards of future appreciation and knowing that they bought their dream house.

This is the type thread that helps agents make money. I would love to see more discussions on negotiating like this brief but informative one. Most of us want to represent buyers or sellers.

Maybe we need an apartment locator forum for those people. There would be less temptation to follow the piper. If apartment discussions cropped up in the other forums, the posting agent would be off topic and would be referred to the apartment forum. Does that idea have any merit??? Just a thought.

At a 500.00 differance in price for most buyers that would be a 3-4 dollar a month differance in their monthly payment. If I am working with a buyer and they are willing to lose a home for the cost of one gallon of gas a month after going through negotiations they have decided that they do not want it. Don't be so quick to offer to give up your hard earned money.

Ohio Realtor made a very good point. That is something that I would also bring up to the buyer.

Have you run a CMA on what the condos where closed in past 60 days? If so is the list price under the price range? I agree with Ohio that you should sit down with your clients and if possible iwth the lender to figure out what is the difference in the payment iwth different scenario. Most buyers just look at the big numbers which does not make a big difference in their monthly payment

Good LUck

Thanks so much for your feedback, folks. We had the home inspection yesterday on this property. We agreed on $98,888 with 3% back to buy down the rate. Planning to close on 9/8. I got my buyer and the mortgage advisor on a conference call and the mortgage advisor was very helpful in getting the buyer to understand.

See you didn't have to give any money away! Great job.