5 NEGOTIATING TACTICS THAT KILL A SALE
Negotiation is a subtle art in real estate, but skilled negotiators can usually find some common ground that satisfies all parties. On the other hand, using the wrong negotiation tactics can sink a deal pretty quickly. Here are some negotiation tactics buyers (and real estate professionals) should avoid:
Lowball offers: Going far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept, and if you’re not even approaching the low end of that range, they won’t even consider the offer.
Incremental negotiations: Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities.
“Take it or leave it”: Try not to draw a line in the sand with your initial offer. The seller can get defensive and consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it.
Nitpicking after inspection: Obviously if inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate.
Asking for more, more, more: Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to build up resentment and think that you’re being greedy.
How Is A Fico Score Calculated?
FICO factors in 5 things in the algorithm to produce a score based on those accounts. See below.
1. 35% Payment history-are bills paid on time? Collections reporting?
(If you have a late reporting on an account, call and request a “goodwill removal” of the late and if a collection is reporting in the last 24 months, call and request them to delete it, if you agree to pay it or provide documentation you don’t owe it. Get it in writing. Record your call.)
2. 30% Credit Utilization -the amount reported once a month by credit cards as a balance versus the limit on the card. (Keep the balance between 5-19% of the limit for optimal results.)
3. 15% Length of history-takes into account the date opened for all accounts open or closed but with a balance. (That’s why when you close an account you opened in 1953 and have used in the last 24 months, your credit score drops! You just lost all that time since it was opened.)
4. 10% Account diversity- do you have a mix of revolving accounts, installment accounts, auto and/or mortgage? (Just remember you want 2-3 revolving accounts because that is used in 30% of the score algorithm. Revolving are credit cards. Installment loans have a set payment every month for a specific term. Mortgages and Auto are other types of accounts factored in.)
5. 10% New accounts or Inquiries.-don’t apply for new accounts unless you are sure you will be approved and make sure to check your report on www.annualcreditreport.com to make sure the inquiries were approved by you.
Remember this and you will always know the rules of the game!