How to negotiate and close a real estate deal

By  

If you're in the market to buy a home, you're in luck--prices are down. But you can still pay too much, including unanticipated closing costs. Gerri Willis, author of Home Rich and CNN personal finance editor, has tips to help you avoid paying more than you have to.

How to negotiate and close a real estate deal

Once you have found the home of your dreams, you are going to need to negotiate and close on that home. Here are a few tips to help put you in control:

How much should you offer?

  • With the current state of the economy you should really make an offer that is much lower than the asking price.
  • If you can’t get your offer below the asking price make sure that the owner contributes something; e.g. closing costs.

Do you need an attorney?

  • Some states require an attorney while other states require a title agent to help in the sale.
  • It is good to have someone on your side who is familiar with the negotiation process on the purchase of your new home.

What's the closing process?

  • The day before the closing get what is called a HUD 1 form from your lender. This lists the fees that you will be paying at closing.
  • You should compare this form to the goodwill estimate you got from your lender when they gave you the loan. You want to make sure these numbers are the same to avoid any hidden fees.
  • If the lender refuses you should tell them that federal law requires that you should have it.
  • At closing you want to make sure you are not paying administrative fees or copying fees. These are bogus fees that lenders can try to sneak in.
Transcript

ROBYN: I’m Robyn Moreno for howdini.com. So you found the home of your dreams, and you’re ready to make an offer on it. Do you know how to negotiate and close that deal? Well Gerri Willis, CNN Personal Finance Editor, is here to lead us through this tricky path. She’s the author of Home Rich: Increasing the Value of the Biggest Investment of Your Life. Welcome, Gerri.

GERRI:  Thank you.

ROBYN:  I need some tips. We’re going to buy our house. How can I make a big that’s not too high or too low?

GERRI:  Well these days, you, I think you should be low-balling out there. You know, prices are down. Sellers are nervous. Now is the time to come in below the offer price and really put pedal to the metal. And make sure if you can’t, you know, get your offer accepted at less than asking, at least they give you something – closing cost, I don’t know. You know, the car in the driveway. I mean now is the time to negotiate.

ROBYN:  Why is it good to have an attorney to help me handle this sale?

GERRI:   Well, not all states require an attorney. Some require just a title agent; it just depends on where you live. I mean, this is mostly about legal requirements. But it’s good to have somebody on your side who does this all the time and is used to these negotiations.

ROBYN:  So it’s worth paying the money to have someone sort of, like, navigate all through this tricky, kind of –

GERRI:   Legally, you probably have to pay someone to do it because you’ll be required to have an attorney in closing in most states.

ROBYN:  So what can I expect during the closing process?

GERRI:  Let me tell you the thing that you absolutely have to do. The day before the closing, get what they call a HUD 1 form. This will list the fees that you’re going to be paying at closing. And you want to compare that with the goodwill estimate you got from your lender when they gave you the loan in the first place. You want to make sure that those numbers are all the same, because sometimes, sometimes they sneak in extra costs.

ROBYN:  So where should we get this HUD 1 form?

GERRI:   You should get it from your lender. They should be willing to give it to you. If they refuse, you tell them that federal law requires that you should have it. They’ll take you seriously.

ROBYN:  What are the closing costs that I can count on, as a buyer, and what is the seller going to be responsible for?

GERRI:  Well I think, what you really want to do at the end of the day is make sure that you’re not paying administrative fees, copying fees. There are a lot of bogus fees out there that you want to make sure you don’t get charged. This is typically how, how lenders, attorneys, sneak in these fees at the least minute. And people end up paying so much more than they should.

ROBYN: The tip, really, here, is to go ahead and get that form, look it over really carefully, and just see what I’m responsible for.

GERRI:   That’s right.

ROBYN: Thank you so much, huge information, especially for a lot of first-time home buyers.

GERRI:   My pleasure.

ROBYN:  I’m Robyn Moreno for howdini.com.

meet theexpert
  • Gerri Willis

    Gerri Willis Author and Fox Financial Correspondent Gerri Willis is the host of The Willis Report, a primetime program on Fox Business Network. She's the author of two business books, “The Smart Money Guide to Real Estate Investing” and “Home Rich.” more about this expert »

check outSPORTS
Little children playing team soccer

get more fromexperts