3 Negotiaton Strategies Sellers Can Use To Walk Away From Closing With More Money

Once you receive a decent offer for your home, you and the potential buyer will probably make the price the main focus of your negotiations.  As important as the price is, it is not the only contract term that determines how much money the Seller will walk away with from the deal.  Because the Buyer will likely be so singularly focused on the price, you may be able to gain valuable concessions from the Buyer along the way without much argument.  Here are three strategies you can use increase your bottom line without making a change to the purchase price.

Tip #1 – Tax Credit Percentage

A frequently overlooked contact term that directly affects the seller’s bottom line is the real estate tax credit. In Illinois, owners of real estate always pay the prior year’s tax bill.  As a result, a seller gives the buyer a credit at closing for unbilled taxes.  The credit is typically 105%-110% (the Proration Rate) of the the last tax bill, prorated through the date of closing.  A savvy buyer’s agent will make the offer with a 110% (or more) Proration Rate.  Your counter-offer should modify the Proration Rate to 105%, thereby reducing the credit given to the buyer at closing and putting more money in your pocket.  For example, 5% of a $10,000 is $500.  As they say, that’s not nothin’.  (For a more in-depth discussion of real estate tax credits, click here.)

Tip #2 – “As Is”

Another way a seller can negotiate some value is to include an “as is” provision in the contract. Although the buyer will still be allowed to have their professional inspection, the buyer is precluded from requesting repairs or credits based on the insepctor’s report.  Let’s face it, regardless of how immaculately you have maintained your home; the inspector will find “issues” to include in his report.  He needs to justify his fee, after all.  Every transaction is unique; however, I generally see sellers giving anywhere from $250 to $2,000 in credits or repairs for sometimes dubious inspection items just to keep the transaction moving forward.  By making the sale “as is” you can maintain your bottom line by cutting off the buyer’s leverage to request costly repairs to the property or monetary concessions based on the inspection.  This strategy is particularly useful in a sellers market, which is the case currently.  (For a more detailed discussion of ‘As Is’ contract provisions, click here.)

Tip #3 – Hire the Right Attorney

Come on.  You saw this coming, didn’t you.  Simply stated, real estate transactions involving the exchange of hundreds of thousands of dollars are not simple matters. These bits of advice are but the tip of the iceberg in terms of what an experienced advocate brings to the table for you.  LoftusLaw is a firm with its primary focus on residential real estate transactions. Our mission is to provide clients with personal, hands-on service, so that each client feels like they understand every aspect of their transaction. Attorney Patrick Loftus has handled residential real estate transactions in the Chicagoland area for 13 years. He is a member of the Illinois Real Estate Lawyers Association. Experience and personal touch are what sets LoftusLaw apart from the rest.

As always, I welcome your comments and questions, and especially your referrrals!  I can be reached at patrick@loftus-law.com or 773-632-8330.  I look foward to hearing from you!

Chicago Property Tax Rebates End Tomorrow

Many of us were caught by surprise when the second installment of the 2015 real estate tax bills arrived in the mail this past July.  Steep increases were the norm, especially for homeowners in parts of town that experienced healthy increases in property values over the past few years.  That’s the bad news.

The good news is that the City is offering many of us rebates of up to $200.  The amount can be more if you are eligible for a senior or enhanced grant.

From the City’s website:

     Eligibility:

     In order to qualify for a City of Chicago property tax rebate, homeowners must meet      all the following eligibility requirements:

  • Chicago Resident and Homeowner;
  • Received the Cook County Homeowners’ Exemption in the most recent property tax year;
  • Household adjusted gross income of $75,000 or less in 2015;
  • City of Chicago portion of property taxes increased on most recent tax bill;
  • Current on the payment of property taxes;
  • Do not owe real estate taxes on other property located in Chicago; and
  • Do not have City debt (e.g. parking tickets, overdue water bills). In cases where City debt is owed, the rebate will be applied to the debt.

For more details on the City’s “free” money, visit this link.  You can apply at any one of 26 neighborhood locations around the city.

Time is running short on this program.  However, if you are one of the many people who took this week off, here’s the perfect way to spend your Friday morning…

Happy New Year to everyone!  Hat tip to Curbed Chicago for the heads up on this program.  As far as I know, it was not very well publicized.