businessmen arm wrestling
"I must break you," Ivan Drago told Rocky Balboa in "Rocky IV." (Spoiler: He didn't.) It's the exact sentiment you may feel while staring at your dream home, thinking about its sellers, and pondering what to do when negotiation talks go cold.
Now you might not be able to break hard-headed sellers, but you can probably warm them up enough to at least bend a bit. We asked accomplished experts what home buyers can do when a real estate Cold War sets in.
1. Give back to the community
Do the sellers love their community? Open your wallet and show some goodwill.Sacha Ferrandi, owner of Source Capital Funding in San Diego, suggests making a donation to a local charity in their name.
"This shows your commitment to the neighborhood and will also allow the seller to leave a positive mark on his or her community," he says.
And it's not about the size of the deposit, but the gesture.
"Sponsoring a park bench or a brick at a local school will be seen as much more valuable to a homeowner leaving the neighborhood than a straight monetary donation," Ferrandi says.
That way when they're gone from the neighborhood, they can feel like they've left their mark.
2. Knock out the home warranty
When you need to sweeten the pot, it's a smart idea to start focusing on some of the little things in the contract. The home warranty is a good place to begin.
"In our market, it is almost standard now for a seller to pay for a home warranty for the new buyer," says Jeff Knox, broker and owner of Knox and Associates Real Estate in Dallas. These home warranty clauses generally cost a seller around $500.
"Being willing to drop little things like this may just break that standoff," Knox says.
Now, a home warranty isn't always offered by the seller. If that's the case, start looking for other concessions you can make. If an inspection comes back with suggested repairs, "be willing to scratch a few of the minor items off that repair list. This will show goodwill and a friendly attitude of trying to make the deal close," Knox says.
3. Offer a package deal
Does the seller seem to have a lot of stuff? Could you find a use for some (or most) of it? Then offer to shell out and buy it. It just may get you closer to closing day, says Kim Clark, a Realtor in Greenwood, SC.
"If they're selling their boat or lawn or equipment or anything that can be a pain to sell, along with their house, come to them with an offer to purchase [those items], too," Clark says. "This saves them the hassle of selling the item or having to figure out a way to bring it with them to the new location."
What's that you say? You don't need a boat? You can sell it. But from the buyer's perspective, suddenly, you start looking like someone who can solve two problems at once.
4. Add more earnest money
Sure, adding more cash to the pile is usually the best thing you can do to crack a stalemate or win a bidding war. But when you increase your earnest money deposit, it doesn't actually mean you pay more. And if you have the right kind of contract and are committed to the deal, your risk of losing that cash is low.
"With all the contingents that are in most offers -- inspection, appraisal, loan conditions, and more -- it is very rare that a buyer ever loses their earnest money," says Mark Ferguson, a Realtor and property investor in Greeley, CO. "It gives the impression the buyer is more serious, and they have at least some cash to show they're a strong buyer. It's more psychological than substantive, but that's how many negotiations go."
5. Quicken the pace
One edge you can give yourself over other buyers is showing the seller you can close fast.
"Tighten up your timelines like inspection contingency. Instead of 15 days, make it seven or 10 days," says Sepehr Niakan, a broker and owner ofcondoblackbook.com in Miami. "If you run into some issue and need to extend, you can always ask for an extension later."
It's similar to how salesmen create a sense of urgency to close the deal. Show the seller you can get to closing day soon, you mean business, and you're a strong buyer. And yes, you will break them. In a good way.