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.