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hello everyone and welcome to another real estate video this is Xavier V Dania the real estate YouTube guy in Phoenix Arizona helping you accomplish your home goals so right now it's November in Phoenix and because we're so used to the heat my body is just breaking down because of the cold so I am wearing a jacket so I apologize for the informality of it but I think you guys know whoever watches the channel know that we like to keep things casual but professional here but anyways I like to introduce a new series to the channel I'm gonna call this series the negotiation series where I'm going to talk about how to get what you want and win out of key parts of the real estate transaction at tans action I've realized that there's basically three main parts of the transaction where you as the buyer have leverage to actually negotiate things in your favor if there is an opportunity the first one is gonna be when you actually make the offer you're getting the offer accepted the second one is when you're negotiating repairs during the inspection period and the third one is if the appraisal does happen to come in low so I'm gonna talk about each one of these factors in three separate videos and in today's video I'm gonna introduce it formally with the probably the toughest one because you can't even do the other two if you don't even get the first part done which is getting your offer accepted so if you guys have any questions or anything regarding the other future installment please wait for the future videos but for now if you have any questions about this one please leave your comments below and what I love about this series guys is I'm gonna give you guys real-life scenarios and situations that my clients and I encountered that actually shows the proof of the pudding or putting the proof or how the heck does that saying go I'm bad at saying winning the offer negotiation or in other words giving your offer accepted that negotiation part of it I want you guys to think of it as it's not black or white it's like did oh you're married did Oh from Pokemon the guy that changes is a different Pokemon adjusted molds but like a pink blob thing that's how I want you to think about each basically each time you encounter a house that you like every house is not gonna be the same it's not just black or white and more importantly every buyer is not the same the first thing you have to do is realize what kind of buyer you are before we even talk about anything else the first category is the most common one this is the buyer who has their down payment or use it is using down payment assistance and does not want to pay their closing costs so we're gonna request a seller to pay for those now this could be because you might have the money for the closing cost but you just want to be left with $0 after closing or maybe you have barely enough for the down payment so there's literally no way you can buy a closing cost well if you're in the situation then a win is going to be getting your offer accepted with the seller paying your closing cost it's that simple now other factors are definitely essential but that's the main component here because if I were to get you a beautiful house and the closing costs aren't being paid by for the seller then it's just like no it's not working to work out here we can't buy this like we need the closing costs that get paid for right so if you're in this category of the situation most of the time your win is going to be getting the offer accepted the house you like of course and getting your closing cost paid the second category I see that's not too frequent but is trying to get more popular right now is your type of buyer who is paying your own down payment or maybe he's using some kind of program but is also paying their own closing costs you are basically the sellers dream here they fantasize it by you they dream about you they just they just love you when a seller lists their property for sale they have fantasies about a buyer who comes in and can pay their own closing cost what's unfortunate about paying your own closing costs is you know if you put another 8,000 towards your loan then you know overall over the life the loan that's gonna actually benefit you right you're paying your own closing costs you are paying your own fees that technically are being incurred by you but that money's is kind of getting gonna get paid and you're not gonna ever see return on it ever right you know the down payment you always get it back when you sell it closing cost is just kind of goes a way to pay your costs so you want to make sure to get as much of value from having to do that and you can do this by either getting offer accepted with below list price that could be scenario so the win for you in this situation is just getting most value the most bang for your buck if you will from the fact that you're paying your own closing costs got it good get it perfect alright now before we get into specific stories of what's helped my clients in each one of these scenarios I want to just make sure to give you some Jen all advice that helps you regardless of what situation you're in my number one tip for de general advice is making a prompt offer the seller is aware when you make you're off when you go look at the house and how quickly make the offer if you go look at the house one day and then it takes you three or four days and make the offer the sellers gonna think that's going on like do they not like my house you know it's all about winning little psychological victories with the seller or the listing agent and one little one that sets up a very good who the heck is daring to mess up my video with this sign right now I've just learned that it's a little psychological win when my client loves a house and then literally a few hours later the offers being made to the seller or the listing agent it just you can clearly show that this buyer is very serious and doesn't want to waste time number two it's not something necessarily you can look but you can kind of see what your agents doing is being professional like the offer that that make sure the offer is being typed make sure that's being very clear make sure there's no check boxes being missed and no forms or areas being blank I've had several situations where this has literally won me the off at the end of the day the listing agent wants to make sure they work with someone that they're gonna like and they're gonna trust and if that person is clear and professional with their contract they probably will be the other hand and I've also been on the other side with the listing agent where the seller just they see the offers like hanray and its really like not professional and it just says a lot and they would rather go with someone that knows what they're doing rather than someone that seems like they're not really you know being professional number three is make sure you know what's going on with the house before you make the offer you want to just like ditto adjust yourself to the right situation if they offer we'll talk about this a little bit later but I want to make sure I just put it here make sure that you're not making blind offers find out or have your agent find out what's going on what's the scenario before making anything happen now if the ADEs that's not responding and they're not you know picking up the phone then you have to make a blind offer it is what it is but you know just just try your best to get a hold of the seller agent and the last one that's probably the most important one that if you're gonna take one thing from this video is doing this writing a nice letter to the seller when making your offer is a really crucial thing now let's be like ditto and let's mold if this is an investor who is selling and many of their flip properties they're not going I care who you are they're just not there looking at the numbers and don't waste your time making a letter in this situation maybe if it's an investor that's like personally involved whatever but most of the times they don't care now if you runs a situation where you actually you're walking around and you can see it's owned by a family that's lived in it loved it taking care of it really well this is the perfect opportunity to make that letter alright so now we're gonna go through each scenario and we're gonna see what potential things you can do to specifically win for that scenario but on top of that things and stories I have personally seen with my clients that we have willed our way into the offer acceptance thing so starting specifically with the folks who need their closing costs paid we've already discussed how winning for them is getting an offer accepted the house you like with them paying your closing cost first and foremost I want you guys to know this and this is where I usually have a very serious conversation with my clients where I kind of just you know humble them a bit we are coming at it at this with a disadvantage if you're coming into this scenario where it's a beautiful house of multiple offers and you go in lowball them and you go try to go do all this like you're a baller it won't work you're coming out of this with is a disadvantage because you're specifically asking the seller whatever offer you're making you're asking for six seven eight thousand dollars off their net proceeds to go to you please know that you shouldn't feel bad about it you shouldn't be or have other people make you feel bad about it but know when it comes to like negotiation you kind of lost some leverage there if you are in a multiple offer situation which a lot of times happens then you have to make it worth the sellers while to accept your offer now it doesn't mean always offer 20 30 50 K go crazy above value a smart seller knows that if they take an offer too high it might have some appraisal issues so you know if you ask for whatever you're asking for closing costs on top of the price then the seller makes what basically breaks even at the list price what I mean by this is if you're looking at a $250,000 house and there's six thousand dollars of closing costs well then if you ask for 256 then the seller is really only making 250 now if you're in a situation where it's multiple offers like and they're all really good offers and it's just like one of those like holy-moly this house is gonna sell quick and it's gonna sell a lot extensive then you have to make it worth the sell while even more you're gonna be competing against other people who are asking for closing costs and everybody's gonna be doing the previous scenario I just discussed about right now what you want to do is you make it worth their while to go with you that way if they go with you they're gonna make a little more money now if they if they do have an offer that's like no closing costs or cash you know odds are they might go with them but let's hope that they're being a little more greedy and they're offering a below list now you could come in and say you know we'll do 260 or even to 65 10 or 15 grand above but you want six or seven grand back I've even seen people go like hey we'll do 258 but we want six random closing costs however much more thousand on top of the price that a are comfortable with and B you feel is a pretty good value based on the comparables of the area of houses that have sold now you might be thinking Xavier you're crazy why would I be making such a higher offer when I'm trying to get a good deal well here's a scenario if there's multiple great offers on this property then those are already under value to begin with a house that is that hits the market and there's way more demand than there is supply automatically just gets gobbled up and it just goes way above price it probably could have gotten away with maybe listing it a little higher right keep in mind very few people actually get to that point where they're making such a higher offer so only do it if you've seen the houses in that area sell for a lot higher than what the house is sold and it's a house that you really really love and you really want to secure the deal most of the time if your agent is confident in negotiating low appraisals like me then even if it's a higher priced house just just make the offer get it accepted and if it appraises lower down the road then figure it out later here's another huge tip for this kin scenario now you might need let's say six thousand five hundred or seven thousand dollars according to your lender for closing costs well first and foremost find out exactly how much closing costs you need for that specific house you might be surprised with the HOA and the taxes being lower that now instead of seven thousand you might only need six thousand dollars well then on top of that what I have had done with my clients that usually helps is we don't ask for the whole amount of closing cost if the house needs about six thousand dollars of closing cost we might only ask for five been 52 or 53 hundred why would I do that well when they seller sees that offer and your companion with other people that are asking for closing costs other people are lazy and they just put the whole amount or they put 3% of the closing costs or whatever now if they get you and they see that you're only asking for five thousand then they're gonna think you know what they're asking for help but they're not asking for the whole pie a lot of times the lender over estimates and it turns out when they said you needed six thousand you might only need five thousand or even forty five hundred so most of the time it works and if I'm wrong and it doesn't it being about higher well they still overestimated it and now if you ask for five thousand and ends up being like 53 or 54 then you have to come up with an extra few hundred bucks it's not really that big of a deal I can recall two stories here one is with one of my clients who this year one of my I'm not gonna say any names to protect their privacy but they there was the first time them looking and this house came up in the certain area that they knew they liked in this house it clearly was really well taken care of they loved it we wanted to go look at it and they're like yep this is the one we already know so I looked at some comps in that area and I think it was listening to 30 to 40 and I've seen houses sell though for like two fifty to sixty so I you know I did my regular talk where I just tell them you know it's up to you guys whatever you want to do here we need this much of closing cost if you want to I feel confident we can ask higher they went like 10 or even 15 grand above price for the offer and the ask for closing cost and we went back and forth and and you know like guys are you you know we're confident they said yes we really want this house we want to do it so we ended up doing that I think it was like 255 250 that we offered and we asked for it because we asked for so much above the price we asked for like six grand back in closing costs and it was a long shot because there was like over 10 offers on the property but I had my clients write a really nice letter they had their photos attached to it well we got a call about it I think this is the only time it's ever happened in my career we were out looking at houses and during the showings they called me and told me they got the offer accepted the reason why is because we made a great offer and secondly that actual owner of the house was already passed away and it was their son that took over it and that specific house had been the original owner owned it for 4050 years and loved to took care of the house the son felt they went better to a young family rather than it just going to whoever else now keep in mind other offers probably were young families but they just didn't know because it was just their name and on top of that because they made such a great offer with the numbers it just made sense to go with us on top of that even if we asked for 10 or 15 grand above value the appraisal still came in like at 265 270 or I'd remember it came in higher than the actual offer we made so even though they offered more on the price it still was worth more than that so it worked out now if you're paying your own closing costs or as we're calling it the B scenario for clients like I said our goal here is to make sure that the value you are bringing on the table as a closing cost gets reciprocated in some way this usually means getting it cheaper right so in this situation if a house is for 250 and it's a multiple offer scenario well if you're paying your own closing costs you might be getting away with 245 or 240 the reason why is because most sellers actually plan to pay closing costs already so they already kind of markup their houses just a little bit to anticipate that but once again you be the ditto of the situation if there is a scenario where there's multiple offers and it's going above list price you can try to offer 10 or 15 K below it's not gonna go anywhere it doesn't matter how valuable you are because they would rather take the gamble of the higher price with closing costs to make 10 or 15 K I have a situation that I can think of mine right now where a client about almost a year ago actually met and found me on YouTube we met up saved up incredible down payment had enough her closing cost and just really was a very solid buyer we were out looking and took about one or few showings that kind of him figure it out but on our second showing we found a house that was really great it had been listed originally too high so it didn't sell right away but the sellers were not kind of antsy to get you know get going so they reduced it it's like 285 brand new tiled countertop it was just beautiful so initially we walked in and we were kind of surprised because you know that everything on paper seemed like it wasn't a good house but walking in it was like wow they just if they had listed a little better up front they probably would have had it sold already the client could afford his own closing costs his priority was to get more of a deal than have the seller pay the closing costs so you know we talked back and forth and and we ended up making an offer at 270 15 grand below value now I told them anticipate a counteroffer I would certainly counteroffer how's the seller I don't there was a lot of presented but I made sure to include in my email a little bit about the buyer so they knew who it goes going to and overall we ended up countering back and forth and I think it's sold to like the high to 70 so it was right in the middle wasn't to 85 those in 270 was like 270 range and the great news is that actually ended up appraising at I think to aid the value that was originally valued at 285 but we got it cheaper so it all ended up working out in a favor we used the leverage for him to get a cheaper let's get the house cheaper and he literally walked in with equity because the house ended up appraising higher which leads me to my final point whatever situation you're in guys you can't get too emotionally tied to houses you're gonna lose you're gonna win some you have to grow a thick skin if you're out there and you're struggling just don't give up and finally if you guys have any questions or anything please leave a comment below I am here to help for everyone who stuck around thank you so much there's two more videos coming up in this series I'm excited to share them with you in the next few weeks this is end of November I know I'm not supposed to be date specific but if you are watching this around the end of the year I hope you have a great New Year's Christmas Thanksgiving Hanukkah whatever you celebrate I hope you have a great time with your fans and family if you want to contact me and you're in the Phoenix real estate area and you have some home goals in the Phoenix Arizona area in 2020 my contact information can be found below or to the side feel free to call me make it appoint me with me text me do what you got to do 2020 is gonna be great for everybody guys I hope you guys have a great one thank you guys have a wonderful yay [Music]