Negotiating A Perfect Real Estate Deal?

In order to be able to negotiate a perfect real estate deal some think you must make sure that your negotiation proceeds in line with the under mentioned principles.
1. Always get the other side to commit first – When you are into serious negotiations you will be better placed if you steer the talks in a direction that makes the other party commit their position before you are required to make a commitment from your side. There are many valid reasons for this.You may find their first quote more advantageous than the offer you intend making from your side. You gain the advantage of being aware of their position before disclosing your position. It allows you to split the difference between your price and their price and close the deal on terms suited to your advantage rather than put yourself in a position that lets the other party gain control over the negotiations to let it end to their advantage by revealing your position first.
2. Always make sure that your first offer is less than what you are finally prepared to pay- When negotiations reach a stage where you are required to make an offer be careful to quote a price that is below the actual price that you are willing to pay. This will ensure that you have enough space for bargaining to close the deal.
3. Maintain a dumb facade- This is important as people feel comfortable when dealing with others less intelligent than themselves in matters concerning real estate. In short, the dumber you appear, the greater are your chances of clinching the deal. Therefore avoid projecting a personality that can be credited with a sharp intellect. In fact, appearing helpless may very advantageous for you in a real estate negotiation. 4. Downplay your authority level –When things appear to be heading for a deadlock on some particular point you can stall the negotiations to prevent them reaching a no return position by saying that you cannot take a decision all by yourself and would need to check on the issue with your wife/other family members or your partner. This may be more acceptable to the other party as it is easier to accept that you are helpless in doing something rather than take your unwillingness to do it.
5. Try to know the seller’s deadlines and use them to your advantage during negotiations- The other party may be under pressure of certain deadlines, such as a time deadline because he wants to move his child to some school at a new location and wants everything finished before the commencement of the new school semester. As the seller’s deadline approaches, he will want the deal closed. This is when you press to get advantage important for you. For example, price may be your highest priority in the deal. Now your quoted price will invariably be subject to inspections of the property, which usually takes a lot of time. Therefore, you should work on all aspects of the deal, but let the inspections linger. When the seller wants to close, you can tell him that you are ready to close the deal in the absence of the inspections but the price will have to be readjusted and quoted the price you want to pay. More often than not, the seller will agree under pressure of meeting his deadline.

Senate Action This Week

Senate Finance Budget Subcommittees continued to receive presentations from various agencies. The full Finance Committee will likely begin debate on the budget the week of April 1st.
The Conference Committee on S.392 (Ritchie), Illegal Immigration Reform, worked on Tuesday, adopting language on a "hotline" requested by the Commission for Minority Affairs. The Conference Committee is expected to continue work, but at this time the next meeting has not been scheduled.
S.865 (Alexander), relating to property tax provisions and the homestead exemption, was given third reading by the Senate this week and was sent to the House for consideration. Other bills of interest still pending the Senate calendar include S.80 (Knotts), legislation that provides that the owner, tenant or lessee of real property is not liable in a civil action to a person who trespasses on his property or a person who is not otherwise lawfully present on the property and who is injured in an accident while on the property. S.490 (McConnell), legislation that limits attorney's fees to a reasonable hourly rate in state-initiated actions, is also pending the calendar.
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State House Action This Week

In addition to approving the state budget, the House also gave third reading to H.3904 (Brady), relating to where sex offenders may live, and sent it to the Senate for consideration. Other bills of interest pending the House calendar include: S.1075 (Senate Finance Committee), supplementing school district funding; S.652 (Lourie), allowing Homestead Property Tax exemption applications through the Internet or mail; H.4549 (Harrell), moving certain motor vehicle tax revenue to the State Highway Fund; H.4578 (Harrison), proposing a Constitutional amendment to abolish a special or public service district; H.4594 (Sandifer), relating to residential heating and air conditioning contractors; S.110 (Thomas), enacting the Uniform Expungement of Criminal Records Act; and S.1112 (Senate Agriculture Committee), approving coastal zone regulations .

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Weekly Mortgage Applications Survey

The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending March 7, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 671.7, a decrease of 1.9% on a seasonally adjusted basis from 684.9 one week earlier. On an unadjusted basis, the Index decreased 1.4% compared with the previous week and was down 3.4% compared with the same week one year earlier.
The Refinance Index decreased 4.7% to 2448.2 from 2569.0 the previous week and the seasonally adjusted Purchase Index increased 1.6% to 368.8 from 363.1 one week earlier. The Conventional Purchase Index decreased 0.4% while the Government Purchase Index (largely FHA) increased 10.0%. On an unadjusted basis, the Purchase Index increased 2.3% to 410.8 from 401.6 the previous week. The seasonally adjusted Conventional Index decreased 3.3% to 898.0 from 929.0 the previous week, and the seasonally adjusted Government Index increased 6.0% to 294.5 from 277.8 the previous week.
The four week moving average for the seasonally adjusted Market Index is down 12.1% to 711.1 from 809.1. The four week moving average is down 2.4% to 361.9 from 370.7 for the Purchase Index, while this average is down 18.2% to 2752.5 from 3365.8 for the Refinance Index.
The refinance share of mortgage activity decreased to 50.6% of total applications from 52.4% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 15.5 from 17.3% of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 6.37% from 5.98%, with points decreasing to 1.05 from 1.15 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 5.72% from 5.26%, with points decreasing to 1.06 from 1.08 (including the origination fee) for 80% LTV loans.
The average contract interest rate for one-year ARMs increased to 6.72% from 5.83%, with points increasing to 1.27 from 0.85 (including the origination fee) for 80% LTV loans.

Fed's latest move surged stocks more than 300 points

NEW YORK (AP) -- Wall Street rebounded sharply Tuesday after the Federal Reserve and other central banks said they will pump $200 billion into the financial markets to help ease the strain from the credit crisis. The Dow Jones industrials surged more than 300 points.
The program is part of a worldwide effort to help struggling banks and mortgage providers. The Fed -- acting in concert with the European Central Bank, the Bank of Canada and the Swiss National Bank -- agreed to loan investment banks money in exchange for debt that includes slumping mortgage-backed securities.
The Fed's latest move was seen as a direct boost to struggling banks by avoiding having to dramatically slash interest rates when the central bank's policymaking Open Market Committee meets next week. Economists continued to be concerned about the unrelenting rise in oil prices and the dollar's weakness, which contribute to inflation -- and cutting rates only add to these pressures.
The market's reaction contrasts with its more skeptical view during the past few weeks about the central bank's ability to keep the economy out of a recession. However, this latest step was seen as a direct lifeline to investment banks -- which previously couldn't borrow in past Fed liquidity plans.
"The big problem has been the financials, and this helps supply money directly to the banks and may take some of the need for aggressive rate cutting off the table," said Peter Dunay, chief investment strategist at Meridian Equity Partners. "The Fed is basically going to take the bad loans off the banks' books, and the market seems to be loving that idea."
In late afternoon trading, the Dow shot up 333.05, or 2.84 percent, to 12,073.20. The index -- which lost more than 500 points in the last three sessions -- is still down about 2,000 points from its October 2007 record high.
Standard & Poor's 500 index rose 36.56, or 2.87 percent, to 1,309.93, while the Nasdaq composite index added 65.43, or 3.02 percent, to 2,234.77.
Government bond prices fell as stocks rallied. The yield on the 10-year Treasury note, which moves opposite its price, spiked to 3.59 percent from 3.46 percent late Monday.
Financial stocks were the biggest movers after the announcement, as many major investment banks dipped to yearly lows in recent days amid concerns about liquidity. The central bank's plan basically allows Wall Street's biggest institutions to put up troubled assets as collateral for loans, use the new capital to make money in the market, and then pay back the loan up to 28 days later.
Though eventually banks would be forced to take the troubled mortgage-backed debt back on their books, the plan still takes short-term pressure off them. Many of these banks will release first-quarter earnings reports next week.
Citigroup Inc. rose $1.42, or 7.2 percent, to $21.11, Washington Mutual Inc. rose $1.72, or 17 percent, to $11.76, and Bank of America Corp. rose $1.33, or 3.8 percent, to $36.64.

gradual recovery during the second half of the year

The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said many buyers have been waiting for higher mortgage loan limits. “The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,” he said. “Therefore, a notable rise in home sales can be anticipated in the second half of the year.”
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, held at a stable level of 85.9, unchanged from December, but was 19.6% below the January 2007 reading of 106.8. “This additional sign of a stabilizing market is encouraging, and our members are telling us there’s been a pickup in shopping activity.” Yun said. “Our hope is that the increased traffic of buyers looking at homes will translate soon into more contract offers.”
The PHSI in the West jumped 13.0% in January to 93.8 but remains 12.7% below a year ago. In the Midwest, the index rose 0.6% to 85.2 but is 13.3% lower than January 2007. The index in the Northeast declined 4.1% in January to 69.6 and is 28.0% below a year ago. In the South, the index fell 6.1% in January to 89.5 and is 23.8% below January 2007.
Existing-home sales are forecast to remain flat around an annual level of 4.9 million in the first half of the year before improving to a 5.8-million pace in the second half. With a weak first half, total sales for 2008 are projected at 5.38 million, but are then seen to rise 3.5% to 5.60 million in 2009. The aggregate existing-home price is projected to decline 1.2% to a median of $216,300 this year, and then increase 3.5% to $223,800 in 2009.
A pattern of disparate price performance continues around the country with a roughly even split between up and down markets. Recently released data for the fourth quarter shows strong price gains in markets such as the Kennewick-Richland-Pasco area of Washington; Topeka, Kan.; and Atlantic City, N.J. At the same time, many areas that have lost jobs are showing price declines.
“Significant price declines in some local markets have sharply and quickly improved local affordability conditions, and are inducing buyers to return to the marketplace,” Yun said. NAR’s housing affordability index is forecast to rise 14 percentage points to 127.0 in 2008.
New-home sales should decline 23.7% to 590,000 this year before rising 7.2% to 633,000 in 2009. Housing starts, including multifamily units, will probably fall 25.1% to 1.01 million this year, and then continue to slip another 2.7% to 987,000 in 2009.
“As builders sharply cut back production, vacant new-home inventory has consistently declined over the past year-and-a-half,” Yun said. “That will permit a quicker return to balanced market conditions in many local areas.” The median new-home price is likely to fall 6.1% to $232,200 this year, and then rise 5.1% in 2009.
The 30-year fixed-rate mortgage, which has moved erratically in recent weeks, is expected to hover around 5.8% most of the year, and then rise to an average of 6.3% in 2009.
Growth in the U.S. gross domestic product (GDP) should be 1.5% this year and 2.4% in 2009. The unemployment rate is projected to average 5.4% in 2008 and 5.5% next year.
Inflation, as measured by the Consumer Price Index, will probably be 3.2% this year and 1.5% in 2009. Inflation-adjusted disposable personal income is expected to grow 1.4% in 2008 and 3.1% next year.

press is beginning to suggest that a bottom is near

To buy a $218,900 home at 5.5 percent is $994.31 a month. To buy next year at $197,010 at 6 percent will cost $994.94.

Builders are tired of being hammered by the press, but slowly, some writers are beginning to build a case for buying a home.

That's because the mood couldn't be gloomier in housing.
Toll Brothers CEO Robert Toll says that "ceaseless" talk of a recession continues to dampen the "mood of consumers," ... "whether or not a recession actually occurs," keeping pent-up demand for housing "on the sidelines."
His sentiments were accurately expressed in the latest new home sales results. The Commerce Department says new home sales in January fell to the slowest pace since February 1995, and that prices have returned to September 2004 levels, or $216,000 for a median-priced new home.
New home inventories rose to 9.9 months on hand, the most bloated in more than 26 years.
That mirrors the dismal showing in existing home sales reported by the National Association of Realtors. In January, sales were down 0.4 percent from December, but 23.4 percent below January 2006.
Consumers sentiment is down, the economy is slowing, and many feel we may already be in a recession.
The natural instinct is to roll up the driveway, shutter the windows and wait for the financial storm to blow over, but not everyone is locking themselves in the basement.
Some members of the financial press are beginning to suggest that a bottom is near, and that buyers should get out and start looking for bargains in homes.