Negotiation Mistakes Home Buyers Should Avoid

so in today's video I want to discuss some some crucial mistakes to avoid when you're negotiating but not only that not only am I going to use real life examples am I going to really break down my insight and share some knowledge with you guys I want you guys to at least have this be a good starting point because you know my information isn't the be-all and all of everything get this get an idea what mistakes to avoid and have it be a starting point to your educational Journey let's talk about a little thing I like to call leverage in its most simplest form according to the dictionary leverage can be used as a verb to use something that you already have in order to achieve something new or better when it comes to real estate property we have to acknowledge first and foremost what is the leverage position that we're currently in let's say we have a house it just got listed two days on the market so listed on Thursday it's currently Saturday within the first weekend they've scheduled about 12 showings on the property and your agent called the listing agent or the seller and said hey how many you have any offers they say Yeah we actually have three offers to our list price uh one is a little bit over if we draw a t-chart what's the something seller has versus what's the something the buyer has in order to achieve something new where are the skills balancing right now well the seller has a lot of interest the seller has already offers on the table in the seller's case the something they have to achieve something new which is essentially selling their house is they have a lot of interest that they can leverage to get more money from the people already offering but more importantly get more money from new offers that are coming in so if you are a buyer in this situation and you have all these details and you say you know what I think I'm gonna lowball them I think I'm gonna offer them 40 thousand dollars under the list price YouTube prerogative one thing you have to know as a home buyer is you are the boss you're the one in charge your agent works for you your lender works for you but if you're not considering all the facts in question then that's your decision to make you make an offer 40K Below in this situation and they reject you and you get really pissed and you throw a fit about it then there's a little bit of disconnection from reality here okay so instead what we do is we have to look at it like this there is a goal you have in mind and we have to identify what that goal is so for you it might be a certain price of a house hopefully it's not that though hopefully it's more a monthly payment maybe you need concessions maybe you want a peace of mind so you want uh like a house that's in pretty good shape you want to find something that's decent so in order to really know and get the best deal for for you essentially we have to a be able to identify leverage situations which we'll do some more examples right now B we have to be very in tune with our goals supposed to be in tune I play classical guitar right now um so sorry for the musical analogies but if you really think about it it's like the Leverage is the key and the goal is if you're in tune with that gear now I don't know if you guys have ever heard music of like when when there's like a band playing in the key of A or something and then you try to solo with it in the key of G okay so let's say your goals are to be let's uh is to be at 350 and get at least uh 10 000 of concessions well let's say you find a house that's currently priced at 370. now you might think whoa this house won't work for me but let's assume it has 90 days on the market not only that but we did a little digging in and the tax records they bought the house four years ago sorry for the bad comma there so they have about a hundred and fifty thousand dollars at least before commission and everything of equity there so there is money to be made with them even and if we don't get them the price they want right this is a no-brainer lowball them well not necessarily the second biggest mistake you can make really I guess not you but your agent can make um is not having conversations like we are in the Modern Age we prefer to text an email I'm sometimes guilty of that too but we have to have conversations with people when it comes to this you're not going to pick up on the little cues or anything if you're just messaging them now technically you're not going to ever talk to the listing agent or you're not going to talk to the seller the reason why is the way real estate works is there's you and you're represented by an agent and then there's a seller and they're represented by the agent and the problem with that is there's so many filters that the meaning the tone a bunch of things can be diverted and changed and everything until it gets to you or likely to the seller so we we have to remove as much potential of of this twisting of the message as possible so if you send a text message just blankly saying that price doesn't work for me your agent can then get that message and hopefully we're assuming you have an amazing agent that will fight for you right well call contact the other agent say that price won't work for us and the age is going to tell the seller they don't want the house anymore and you're like oh you're like and the problem with this is you'll never know that the seller which is a fine we're not selling the house to them anymore it tells their agent and then your agent says okay they're not buying the house no more and then your agent calls you hey they don't want to sell the house to us anymore this could be avoided if you are always keeping your agent in check and you're making sure these are having their conversations being had this is awkward because you have to tell your agent how to do their job but they're getting paid very well there's there has to be conversations every single thing piece of negotiation every single exchange of information unless it's like an update or something has to have a phone a phone call conversation and you need to make sure to keep your agent liable of this like when they tell you some information you know was this a phone call or is this a message oh this is just a message okay do you mind calling them and just kind of filling out the situation better more and see what's going on so now in this previous example we're using where it looks like this is a perfect situation where your agent could call and it turns out even though they've been naming 90 days on the market they just got an offer at list price with no closing costs so here's the thing do we believe him or not there could be a buyer dumb enough out there or maybe not buyer but the agent didn't do any research and just like the buyer really wants the house the buyer uh called and you know they were out of town for 90 days and they came back and this is the one right and they want to offer list price they just want to get it either way you would have never known this if there wasn't that phone conversation had with agent the agent you would have never noticed if you just tell your agent hey agent make an offer a 340 send it over there let's see what they say and your agent doesn't bother calling and they just send over the offer you have to make sure your agent's having conversations or had a recent situation where um we were the buyers and we made an offer on the property and I think that the agent somehow leaked it or I don't know how I found out but they told us that they they're like we really need this to work out we are we have to make sure we work this out because we're buying another house in wherever whoever what's where upon finding that out we got a lot of things our way go in that transaction one of the best books I've ever read was um never split the difference but one of the things she said in that book is once you give away leverage or you give away a quote-unquote he calls it Black Swan you're it's now a hostage you become a hostage to the situation if the other other side knows or has or discovers they have an overwhelming amount of Leverage over you you're not their Mercy you're now their hostage what I have to tell my virus is like it's not our responsibility what's going on with the seller like it's not our responsibility that they did everything so tightly and they mismanage and they didn't give enough space between their home sale and their home purchase to make sure they like they're the ones that did this really willy-nilly we're not responsible for that so if something's not going to happen the way we want it to we okay then we'll cancel no worries we'll just go find another house and of course it'd be like whoa whoa hold on hold on right that's the thing identifying that situation and having these conversations is the only way you're going to find out these little these little cues where you you just understand the leverage you have over somebody now here's the third one and this was a little controversial but it wouldn't be Javier vidan video If it wasn't controversial um is you have to understand one concept you're buying a house I'll draw the the diagram again so there's the buyer's agent I'm saying you because I'm assuming you're a home buyer watching this but I guess if you're a home seller too it's uh applicable if you were to ask anybody where the negotiation is happening where the negotiation takes place most of the times they'll stay there right between the buyer and the seller's agent the buyer is the hero representing the buyer the seller's agent is the hero representing the seller and they're having this Mega Clash but here's the reality of the situation in a real estate transaction there's more than one negotiation happening that's happening right here that's happening right here if I have a buyer telling me this is the only thing I can do and that's it and I'm like okay but are you sure there's nowhere else we can come up with anything like this is the buyer's like nah this is it I don't have anything else if I don't get this like this is it now is that the truth I don't know you're only giving me the information that's there there's multiple layers and there's multiple negotiations happening so whatever your goal is don't expect your buyer's agent to follow it to the T you have to remind your buyer's agent these are my goals this is what I have to do this is it now odds are could you call your Uncle Pete and be like Uncle Pete can I borrow 5K maybe that's an option but is that an option you'll tell your agent Maybe not maybe you don't tell your agent about your Uncle Pete because if your agent knows about Uncle Pete then when they negotiate they can always have that mental you know go back in their head uh they're gonna call their own compete anyways if they have to come up with three thousand dollars uh they'll just have to call and compete right so be aware the mistake is to not be aware of this the third mistake of course is there is multiple negotiations happening yes don't be an adversary to your agent but be aware you're supplying them with the tools they need to get the job done don't give them little things and little little extra tools that they could potentially use against you now if you have absolute trust in your agent then that you can take that risk but I'm just here to make a video okay the last mistake you need to absolutely avoid you might get a paragraph two paragraphs a few sentences the boom boom boom boom bunch of crap and in all that crap there's this and there's all this the problem when it comes to negotiating back and forth you know trying to get a deal whatever is there's this that lets you influence you this could be a sob story this could be oh my gosh this is it like if I don't get this sold I'm screwed and you know I don't blame people for doing it it's what they're used to it's a human condition right they the first negotiations we have is with our parents and a lot of people learn the behavior of you know SOB stories or using very emotional things that try to get their way but at the end of the day there's only one thing that matters and that's that red line let me share a message I got from a really large company who was negotiating a very aggressive inspection thing so there it is right here let me um remove let me make myself super tiny I know I'm gonna be seems super weird but let's just uh Go With It buyers are already getting over 8 000 in sellers concession and them this is they're talking about themselves or it may or may not been a corporation is losing almost 140 000 on this home and we're already selling it under list as well there is much more to provide here as we're trying to give the best deals possible as we have owned this home for a while now I can come up with 2K um but more than that it just isn't Justified how given the rest of the deal so just long story short we were already receiving eight thousand dollars of concessions we're already getting it under list price very touching story I would have called the buyer goodbye guys this is this is the most they can do they're losing so much money already they lost a hundred and forty thousand dollars let's please get them out of their misery uh they can only come up with two thousand dollars that's all they can do buyer let's let's help them out it sound ridiculous because it is what's the only thing that matters in this line so that's the only thing that matters the whole line for negotiating back and forth and they come back I can come up with 2K that's it okay we're not gonna let anything else affect us I am not responsible for their terrible fine marketing decisions I'm not responsible for their terrible business practices I'm not you're not gonna put that weight on my shoulder So after talking to my clients you know with receiving a huge amount of concessions already rate buy downs and everything we're like okay let's just uh let's just do three thousand we'll be good we'll be good with three thousand so I I got that so I think we could squeeze more out of them so I was like I'm gonna try 4K I responded back uh let me see if I can just read the response yeah that certainly sounds like a tough situation for you we would love to help you get this house off your books fortunately two thousand dollars doesn't fit with our goals after talking to our clients they may be able to make four thousand dollars work let's get this going so we can focus on closing they agree to four thousand um mistake you can make is to let the 95 of the paragraph influence your decision only focus on that one line that matters you may think you're being a complete butthole but every time I get a client and they're just riding my booty I respect that it annoys me sometimes but I respect that because I was like these guys know what they're doing these guys are going to get a great deal and when they make my life a living heck then that means they're challenging me and they're pushing me and you guys are going to get a better deal than most so that's all the time we have I know we talk more about the financial uh part of sorry the mental part of it and the mindset I've made a lot of videos about like identifying opportunities and real estate stuff so you know feel free to watch those I might find one and put it here but either way uh this is part of my homebuyer tip series if you want to find the next video by home buyers tip series it's the closing costs and what I did is I got two or three closing cost sheets and I think only two and I went down line by line of what each closing costs are now it's a lot more detailed but once again it's part of my home home buyer tip Series so if you watch that one then that video will tell you the next video to watch and that video will tell you the next video to watch so at least you can start filling it up so start watching it hit it safer later do what you got to do check it out appreci you guys time if you're still watching thank you thank you guys see you on the Discord see you on the live streams appreciate you have a good one

Channel: Javier Vidana

Views: 43,634

Keywords: javier vidana, fha, conventional, first time home buyer, buying a house, first time home buyer mistakes, real estate, first time home buyer tips, home buying tips, how to buy a house, buying a home, realtor, first time home buyers, how to buy a home, home buying, home buying mistakes, investing, biggest first time home buyer mistakes, first time home buyer tips and advice, first time home buyer advice, 5 biggest mistakes first time home buyers make, buying my first home

Id: 53zj0d4zLNI

Length: 15min 21sec (921 seconds)

Published: Fri Feb 24 2023