Steve Olson
Negotiating just to negotiate
We all want to make sure we get a good deal. Too often though emotions rise during negotiations and when you look back at it, it is normally over stuff that is small. This causes unneeded stress in the deal and is not a strategy that works.
Extending contingencies
The contingency period in the CA contract is one of the longest in the US. It is set this way because we have additional things to inspect that other markets don’t.
Home sellers want stability. They understand you need to do your due-diligence, but they are looking for a committed buyer. The contingency period is there to help you uncover things you didn’t see when viewing the home and to confirm it is in the condition it is when you wrote the offer and based on how you wrote the offer. If there are major things that pop up, then that is the time to ask for repairs, corrections, or credits.
This is not designed to get the seller to remodel the home for you. These are homes that have been lived in. Every home has issues.
If you wrote an offer on a home in Olde Carlsbad at $1.6m and then found out later that there are multiple foundation and truss issues, you would have written a different offer. This is why we have contingency periods.
Low Earnest Money
Earnest money is your “at-risk” for the deal. This is the number you are putting up in good faith to let them know you are serious about closing.
At closing this will convert to your down-payment. While the amount of earnest money put down will not affect the seller’s net proceeds, the amount you put down, is one of the tools that will show the seller you are serious about buying their home.
Not having a solid pre-approval
A good listing agent will call the lender. The lender can’t disclose any personal info but that will say how far down the process the buyer is. If the lender said it was only a quick conversion and a credit pull but no income was verified etc, then your odds of getting the deal accepted especially if there is another offer is low.
Remember, sellers want certainty. No one wants to go under contract only for it to come back to market in 24 days. It is a loss for everyone.
Now let’s talk about a few things you can do to speed up the negotiating process to get your home under contract.
Remember, at any time, another offer can come in which completely changes the negotiation. Now, you’re no longer negotiating against the seller. You now have to beat out the other buyer.
We have run into this multiple times. We write an offer, get a counter then the buyer “thinks” about it for a day or two. In the meantime, another offer comes in and they are then forced to pay more for the home than if they just would have moved a little quicker. Even when you are the only buyer, speed is your friend.
Speed also shows you are serious and committed.
Here is a quick checklist to get your offer accepted
- Write a price closer to what you are willing to pay so you can shorten the back and forth (and frustration)
- Earnest money at least 1% and ideally 3% of the purchase price
- Leave contingency periods as they are (shorten them if you feel comfortable in the property)
- Make sure you’re fully pre-approved. The lender has reviewed credit report, income, and assets.
- Consider waiving the appraisal contingency if this is a competitive home (not an issue as much in the 2025 Carlsbad market) - Remember this is a contingency, this is not an auto agreement that the seller will lower their price if it comes in lower, it just gives you the power to cancel if that is a big deal to you.
- Don’t shorten the contract negotiation timeframes but act as if they are shortened
- Make sure your contract is complete. Incomplete contracts kill deals.
As a bonus, it is important to remember you are negotiating with the seller, not your agent. You and your real estate agent should be on the same page in how you want to approach a deal.
