Bargaining in a Realty Reality
Who says you can't get a deal in today's market?
Plenty of homebuilders are offering buyers five-figure price discounts right now, but how 'bout a seven-figure one? That's what one NFL player recently got on a 12,000-square-foot home in an exclusive Lake Wylie community. Real estate broker Terry McDonald says the former Panther, whom he declined to name, had been looking in the area early last year as a potential retirement location. He was close to buying the manse -- originally priced at $3.3 million -- when his current team, the New Orleans Saints, signed him for an additional three years. Several weeks later, however, McDonald discovered the house had become bank owned, and his buyer bagged it for his future retirement for just under $2 million.
"To get this good a deal on a house you already liked at full price -- that's a lightning strike," says McDonald.
- Jen Pilla Taylor
Charlotte is weathering the housing market crisis just fine. In fact, according to a November 2008 report -- the most recent published -- issued by S&P/Case-Shiller Home Price Indices, which measures the residential housing market in twenty regions of the United States, the value of Charlotte homes only marginally depreciated last year. Charlotte's 5.3 percent depreciation is peanuts compared to San Francisco's 30.8 percent or Phoenix's 32.9 percent decline.
The good news? Your home is worth something. The bad news? If you have the means to be a buyer these days, buying dirt cheap might be more complicated in a city whose price tags haven't gone down much. Here are six ways you can strike a deal in Charlotte real estate. How low can you go?
Negotiate the kitchen sink
Negotiating to keep household items (think: washer and dryer, chandelier) will not only appreciate the house's overall value, but potentially save you from spending future monies on those items. "While the house could be professionally decorated with $15,000 drapes, the hardware comes with the house, the drapes do not," says Virginia Halter, a Charlotte RE/MAX agent. "If it's the drapes that lure someone into your home, is it worth losing a buyer over drapes?"
Even if you lose the bidding war to another buyer, follow up and make sure the seller sealed the deal. In a nationally volatile market of mortgages, if deals fall through the seller might be ready to compromise the second time around. "That's happening a lot right now, in every price range—even $2 million homes don't get their financing sometimes," says Patty Hendrix, co-founder of HM Properties. "The deals are falling apart during inspection and the loan periods. In one or two months of the sale, some people may have lost their jobs."
Be interested in the interest rate instead
"Builders are hungry so you can ask them to bring down the price of the interest rate," says Halter. This is also a smart way to keep the property value high. Hendrix agrees, adding that builders are desperate. "Especially in a newer neighborhood, builders want to make sure comparables do not go down, so an interest rate on one house may go down to maintain the value of the neighborhood."
"Buying and selling houses is very personal and an intimate experience," says Halter. "And you'll attract more flies with honey." By letting the seller know how nice the house is, you communicate your interest as a buyer and generate some pathos in the business relationship. Plus it's an opportunity to mention numbers. Halter suggests writing a letter of appreciation: "It's evident in the beautiful hardwood floors and back porch remodeling that you've taken such good care of the house and we would love to do the same. We hope you can consider our offer of $XXX,XXX."
Put your best bid forward
Remember that while a lot of the country is dropping home values by 30 percent, Charlotte remains stable. "We are not negotiating a 15 to 20 percent decreased rate," says Halter. "They are not giving away homes in Charlotte, so if you do bid a lowball offer at least back up your reasoning." Figures like neighborhood sales, tax rates, length of time it's been on the market, how many agents it's been listed with, and how many price reductions it's had can be taken into consideration.
Timing isn't everything, but it's something
If the seller is currently living in the home without a single box packed, he or she might not be willing to leave at the drop of a figure. "But if the house is empty and the owner is carrying two mortgages, he or she may be motivated to sell more quickly and at a lower price," says Halter. Hendrix adds that in addition to a seller's motivation, closing time is also important. "If someone can close in three weeks, it's a huge advantage," says Hendrix.