It’s not brain surgery, people!
You can offer free cars, hiring a marching band, and increase broker commissions, but the number one reason buyers don’t buy a property is because they think it’s too expensive!
Sellers who aren’t willing to negotiate, or even listen to realistic offers from buyers are suffering, to be sure.
Developers got smart, fast. They are willing to either lower their list prices or, more common, to offer concessions to buyers. So, they can get away saying, “We didn’t lower the list prices, for anyone,” when, in fact, they’ve done the opposite: given more away for the same amount of money.
A couple of ideas from a story in today’s Globe which may help you, as a buyer, if you want to buy now, but get a good deal.
If the seller (individual or developer) won’t budge much on price, ask him or her to kick in closing costs – you still might pay more than you’d prefer, but your out-of-pocket expenses will be less.
Better, have the seller pay points or “buy-down” your mortgage loan.
To help move condominiums throughout Boston, Chris Tuite, the president of RE/Max Waterfront, has arranged with a lender, Drew Mortgage in Shrewsbury, to allow sellers to purchase points against buyers’ loans.
Each point costs 1 percent of the total loan and lowers the interest rate by one-quarter of 1 percent – which gets buyers a much lower than market rate over the life of the loan without having to fork over thousands to buy their own points.
Tuite just created the program, so it’s too early to know if it’s working. “We just started advertising it,� he says. “It’s making the phone ring. People can’t argue that the rates are too high.� As to why the sellers don’t use that money to lower the price, Tuite says that “if you lower your price by $15,000, it’s not going to make a big difference with a $500,000 property. But if you can lower the interest rate for a buyer, that makes a difference.�
Or:
Other developers and sellers are offering to pay the points required for temporary interest rate buy-downs. These cost less than points that buy down the rate permanently and allow the buyer to pay a below-market rate for the first one to three years of the loan.
I couldn’t agree, more. The seller ends up lowering the price by less than he or she would, otherwise, while you get a lower mortgage loan rate.
If you are interested in learning more, call your friendly mortgage lender. I’m sure he or she would be really happy to hear from anyone, these days. Really, really happy.
More: Desperate Measures – By Kris Frieswick, The Boston Globe
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