Negotiate Your Best House Buy

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Buying a home can be emotional, but negotiating the price shouldn’t be. The key to saving money when purchasing a home is sticking to a plan during the turbulence of high-stakes negotiations. A real estate agent who represents you can guide you and offer you advice, but you are the one who must make the final decision during each round of offers and counter offers.

Here are six tips for negotiating the best price on a home.

1. Get prequalified for a mortgage

Getting prequalified for a mortgage proves to sellers that you’re serious about buying and capable of affording their home. That will push you to the head of the pack when sellers choose among offers; they’ll go with buyers who are a sure financial bet, not those whose financing could flop.

2. Ask questions

Ask your agent for information to help you understand the sellers’ financial position and motivation. Are they facing foreclosure or a short sale? Have they already purchased a home or relocated, which may make them eager to accept a lower price to avoid paying two mortgages? Has the home been on the market for a long time, or was it just listed? Have there been other offers? If so, why did they fall through? The more signs that sellers are eager to sell, the lower your offer can reasonably go.

3. Work back from a final price to determine your initial offer

Know in advance the most you’re willing to pay, and with your agent work back from that number to determine your initial offer, which can set the tone for the entire negotiation. A too-low bid may offend sellers emotionally invested in the sales price; a too-high bid may lead you to spend more than necessary to close the sale. Work with your agent to evaluate the sellers’ motivation and comparable home sales to arrive at an initial offer that engages the sellers yet keeps money in your wallet.

4. Avoid contingencies

Sellers favor offers that leave little to chance. Keep your bid free of complicated contingencies, such as making the purchase conditional on the sale of your current home. Do keep contingencies for mortgage approval, home inspection, and environmental checks typical in your area, like radon.

5. Remain unemotional

Buying a home is a business transaction, and treating it that way helps you save money. Consider any movement by the sellers, however slight, a sign of interest, and keep negotiating. Each time you make a concession, ask for one in return. If the sellers ask you to boost your price, ask them to contribute to closing costs or pay for a home warranty. If sellers won’t budge, make it clear you’re willing to walk away; they may get nervous and accept your offer.

6. Don’t let competition change your plan. Great homes and those competitively priced can draw multiple offers in any market. Don’t let competition propel you to go beyond your predetermined price or agree to concessions—such as waiving an inspection—that aren’t in your best interest.

COLORADO SPRINGS, Colo. – April 13, 2011 - Zane Whitfield, an experienced real estate professional and member of the Pikes Peak Association of Realtors, has joined Coldwell Banker Residential Brokerage in Colorado Springs as a broker associate. Zane currently serves the diverse real estate needs of clients throughout the greater Colorado Springs area, including the communities of Monument, Manitou Springs, Fountain, Falcon, and Woodland Park, among others. "My team at Coldwell Banker Residential Brokerage is dedicated to providing our buyers and sellers with valuable information needed to make informed home buying or selling decisions," said Whitfield. "We strive to provide the best customer service possible while conducting business with honesty and integrity. I chose Coldwell Banker Residential Brokerage due to the company's high profile national brand recognition, superior marketing programs, and leading Internet presence." Whitfield earned his real estate license in 2001 and was previously with Heritage Realty. A six year veteran of the U.S. Army, his professional background includes six years in outside sales for Georgia Pacific where he earned Sales Person of the Year honors in 2000. Zane and his wife, Kristen, enjoy spending time with their three children and three Jack Russell terriers. He enjoys coaching Little League Baseball, traveling, and competitive shooting. Zane Whitfield can be reached directly at 719.332.3930 or via email at zane@newhomescoloradosprings.com.

Little-known secret to reduce mortgage payment Request loan recast when financial disaster strikes Inman News™By JACK GUTTENTAG A mortgage recast is an adjustment in the monthly payment that makes the payment fully amortizing. The recast will be a payment increase when the existing payment is less than fully amortizing, and a payment decrease when the existing payment is more than fully amortizing. For example, let's say your home loan has a balance of $100,000 at 5 percent with 300 months to go and a payment of $450 that, if continued, will not pay off the balance. The payment recast is an increase to $584.60, which will fully amortize the balance over 300 months. However, if the current payment was $650, the recast would be a payment decrease to $584.60. Payment-increase recasts occur on two kinds of mortgages. One carries an interest-only option, where the required payment for some initial period, often 10 years, covers only the interest. The payment-increase recast occurs at the end of the interest-only period. The second type of mortgage open to a payment-increase recast is the adjustable-rate mortgage (ARM) that allows payments that are less than fully amortizing. These ARMs sometimes have recasts at specified intervals, often every five years, or the recast may be triggered by the loan balance reaching some limiting value, such as 110 percent of the original loan amount. This can happen at any time, or it may not happen at all. Payment-increase recasts are designed to protect the interest of the lender by making sure that the loan will pay off as scheduled. All interest-only loans and all ARMs that allow payments that are less than fully amortizing have explicit provisions for recasts in the loan contract. Provisions for payment-decrease recasts, in contrast, which are designed to meet the needs of borrowers, are not included in loan contracts. The lender can agree to a recast; can agree subject to a charge, which can range from nominal to extortionate; or can refuse it. I have encountered all three such responses. The borrowers who request recasts usually have fixed-rate mortgages (FRMs) on which they have been making extra payments in order to pay off before term, and then unexpectedly encounter a financial reversal. With their income reduced, their objective shifts from paying off early to reducing the payment, for which purpose they need a recast. They deserve it, and the cost to the lender is nominal, but some lenders will take advantage of them just because they can. The borrower's right to a payment-reducing recast ought to be mandatory for all home mortgage contracts. Borrowers should not have to grovel for what can be critically important to them and of little consequence to lenders. Making recasts into a right would have the side benefit of encouraging borrowers to make extra payments as a form of contingency insurance. Note that payment-reducing recasts are needed for fixed-rate mortgages much more than for ARMs. The reason is that when the interest rate is adjusted on an ARM, the payment is automatically recast. On ARMs that reset the rate every year, no additional recasts are needed. On ARMs with initial rate periods of 5-10 years, however, the need for a recast can arise in the early years just as it does on FRMs. Today, borrowers are motivated to make extra payments primarily by the hope of getting out of debt sooner. With a right of recast made explicit, they will also view extra payments as a worst-case backstop. The more you pay when you have the means, the larger the payment reduction you can command in an emergency. I can't think of an easier way to motivate consumers to save more. The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at http://www.mtgprofessor.com/.

Mortgage rates ease for third week in a row
MBA survey shows demand for purchase loans still weakBy Inman News, Thursday, March 3, 2011.
Inman News™
Mortgage rates fell for a third week in a row as turmoil in the Middle East had investors seeking safety in bonds, including those that fund most mortgage loans.

Rates on 30-year fixed-rate mortgages averaged 4.87 percent with an average 0.7 point for the week ending March 3, down from 4.95 percent last week and 5.05 percent the week ending Feb. 10, according to a weekly survey by Freddie Mac.

A homebuyer taking out a 30-year fixed-rate loan this week could expect to pay $263 less per year on a $200,000 loan than a borrower taking out a loan at 5.05 percent, said Frank Nothaft, Freddie Mac chief economist.

Luxury Home Sales Soar

Luxury home sales in the Denver metro area jumped sharply in December compared to a year ago as the luxury market gained momentum heading into the new year, according to a report released today by Coldwell Banker Residential Brokerage.

A total of 51 homes sold for more than $1 million in the Denver Area in December, up 54.5 percent from the 33 that changed hands in December 2009. Sales were also up nearly 16 percent from November. Independent broker Gary Bauer released a report last week, showing a similar trend. Both Coldwell Banker and Bauer used data from Metrolist, publisher of the Multiple Listing Service.

The median sale price of million-dollar homes edged higher in December from November, reaching $1.25 million, up from $1.23 million the previous month, according to Coldwell Banker. However, the median was down 7.4 percent from last year's level of $1.35 million.

"There definitely has been a lot more optimism in the market lately," said Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado. "High-end buyers are starting to feel more confident about the economic recovery, both in the U.S. and here in the Denver area."

Mygatt added that buyers in general are realizing that there are unusually good opportunities in the market. "This is a rare situation where you still have interest rates near record low levels at the same time that home prices are extremely affordable and inventory is plentiful. I think buyers understand that these conditions won't last forever, especially as the economy gains momentum."

Some key findings from this month's Coldwell Banker Residential Brokerage luxury report:

*The most expensive sale in the Denver area in December was a five-bedroom, nine-bath 9,270-square-foot home in Cherry Hills Village that sold for $3.1 million.
*Denver boasted the most million-dollar sales with 11, followed by Boulder with 10, Cherry Hills Village with six and Castle Rock with four.
*Sellers on average received 90.32 percent of their asking price, up from 83.87 percent a year ago and 89.27 percent the previous month.
*It took an average of 148 days to sell a million-dollar home in the area, up from 145 days last year but down from 151 days the previous month.

CNN Money.com Colorado Springs is ranked number 8 in the country to most likely rebound from the housing crisis.

Colorado Springs, Colo.

Median home price: $220,000

Drop since market peak: 12%
Forecast gain by 9/2012: 2.9%

Demand for homes is still strong in Colorado Springs, according to Chris Mygatt, president of Coldwell Banker Residential Brokerage Colorado. The area's economy has been steady, thanks to the stabilizing effects of government jobs, especially connected with the Air Force Academy and military bases.Demand for housing has grown along with the population. That rose more nearly 17% from 2000 through 2009, faster than the national average of just over 9%.
Mygatt credits the Springs' popularity to the mild, four-season climate, natural beauty and proximity to the cultural and entertainment attractions of nearby Denver. Affordability is a big factor as well. You can buy a fine, three-bedroom, two-bath house in a good neighborhood for about $230,000. Those prices will remain flat this year, according to Fiserv's forecast, and pick up in 2012, rising 3.6% in the 12 months ending Sept. 30.