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Advice: Let facts do the talking: Home negotiation calls for research, emotionless parley
By Paul Restuccia
Friday, December 5, 2003

Nancy Downey was willing to pay the $449,900 a seller wanted for the Dedham home she bought recently, but with a little savvy negotiating, she managed to knock some $20,000 off the price.
      ``My fiance and I really wanted the house, but we didn't jump on it right away, putting our bid in a few days later,'' said Downey, a Boston University administrator. ``It made the sellers question whether we would put in an offer, (which) put us in a better position.''
     Even in today's hot market, home buyers can save money if they develop an effective negotiating strategy.
     Experts say you can negotiate successfully if you use facts such as a home's condition, comparable-sale prices, how many buyers want the property and what time of year a house is on the market.
     ``The biggest problem with negotiation is that buyers get emotionally involved,'' said Ray Brown, co-author of ``Homebuying for Dummies'' and a real estate agent for 40 years. ``It's like what they say about prizefighters: `If you get angry, you lose.' People have feelings, facts don't. Negotiators need to be armed with the facts.''
     In Downey's case, she realized the home she wanted was ``family friendly'' - with a nice back yard and nearby playground - but had drawbacks for buyers with kids.
      For one thing, the home is on a busy street. The property also went on the market just after the school year began - when many buyers with kids don't want to move.
      Finally, a comparable house a few streets over had just sold for a lot less than $449,900.
      With those facts in mind, Downey's buyer's agent, Sam Schneiderman, of Greater Boston Home Buying Inc., suggested she initially offer $420,000.
      After some give and take, the seller accepted $430,000.
      But the savings came with an emotional price. ``I didn't sleep much that weekend (after making the initial offer),'' Downey said. ``I thought for sure we wouldn't get the Dedham house.''
      Foxboro buyer's agent Paul Frank, president of the Massachusetts Buyers Agents Association, understands the emotions involved.
     ``The first thing I ask the buyer is, `How badly do you want this property? Are you going to kill yourself if you don't get it?' '' he said.
     Once gauging his client's attachment to a home, Frank prepares to negotiate on a client's behalf by getting as much information as possible on the property.
     He finds out how long the house been on the market, if the seller has ever reduced the price or if the seller ever took the property off the market after failing to find a buyer.
     Frank then researches comparable properties in the neighborhood and tries to learn if other buyers are interested in the home.
     Consumers who don't have buyer's agents can attempt to get similar information from the home's listing agent.
     But experts say a buyer should realize that the listing agent works for the seller. They recommend you never tell the listing agent such things as how high you're willing to go in price.
     Brokers also say that in addition to doing research, buyers should make themselves as attractive as possible to sellers.
     For instance, getting a preapproved mortgage puts you in a stronger negotiating position.
     Another good idea: prearranging ``bridge financing'' so you can close on your new home even if you haven't sold your current one yet.
      Brokers say making an offer contingent on selling your existing home first is often a deal killer.
      Buyer's agent Schneiderman says that good home negotiation benefits the buyer and seller.
     He recently helped an expert negotiator - mergers-and-acquisition lawyer Alan Glass - buy a Newton house from another lawyer.
     ``The negotiation for this house was short, focused and polite,'' said Schneiderman, noting that the entire process only took one day. ``The seller needed - and got - some closing flexibility, and the buyer had a certain price point in mind. It was very businesslike.''
      Glass, who plans to move into the house with his wife in a few months, said a good negotiator bases price on what the market looks like.
      ``You don't want to come in with an offer that's too low that would insult the seller,'' he said.
     Experts say you can also often reopen negotiations after signing a purchase-and-sale agreement if a home inspection turns up problems.
     Downey got a $2,950 credit for roof repairs identified by the inspection, bringing her final purchase price down to $427,050.
      The 43-year-old, who has sold two properties and bought three in her life, said her latest negotiations taught her to be tougher - but more realistic.
      ``The first time you have your heart set on a house and you don't get it, it feels like the end of the world,'' she said. ``But losing it is better than getting into a bidding war and overpaying. You'll always find another house to fall in love with.''
     

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