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Updated over 6 years ago, 06/11/2018
NEGOTIATED SALES PRICE $754,498...and $98? Really?
Why would the price have not been negotiated up $2.00 to $754,500 or down $98.00 to $754,400, a round number?
Do you know how much chaos and extra time and effort throughout the loan process correcting the sales price and possible delays such a number can cause on the Mortgage side?
To all Investors: do yourselves and everyone on the mortgage as well as on the title side a huge favor and simply round your sales price up or down to the nearest round 100 number.
Listen, I am the King of the oddball number thing as for the last 20 yrs, I've made my Qualification letters oddball amounts and have had to argue with realtors all the time over why the letter is for example $804,117 purchase price vs. $804,000.
Or when the offer is being made for $750,000, why am I sending a letter for $804,117?https://www.biggerpockets.com/forums/552/topics/557953-negotiate-from-a-position-of-strength
@Brian Garrett, you have obviously never worked for a lender or been a Mortgage Broker as your comments above seem to scream lack of knowledge on this particular subject.
Have one or more of your "Preferred" lenders join this discussion and let's see how they respond to some questions on this topic.
Send them this thread and ask them to join the discussion so the investors here on BP can determine what is best.
@Account Closed I'd argue otherwise and say your entire thread and all of your responses scream lack of common sense. You're aware that every investor is telling you they disagree yet you continue to argue? Take a look in the mirror buddy.
@Account Closed you say that most people don't know the struggle of a lender and that is true, but you don't seem to see the value in the negotiating tactics that your clients and their realtors want to employ. So the question becomes which is more important to the client the negotiating tactic or the convenience of the lender (who shouldn't make mistakes anyway). Your suggestion of rounding after the sale, would probably be more confusing and cause more delays than just sticking with an oddball number. I'm sure you're good at your job, but in this case I think that just accepting the odd numbers would best serve the client.
@Brian Garrett, the I'm pretty sure...no, I'm 100% sure that all of your lenders will agree with my advice on this topic.
That person probably recently read, "Never Split The Difference".
@Aaron K., offer and acceptance has been around for thousands of years.
But this Post Dodd Frank Act, HVCC, TRID mortgage industry has only been around for about 10yrs. and is why so many mortgage industry people bailed out and became realtors. Many, with having a Mortgage industry background, have had an unfair advantage.
Discussions on topics like this are very beneficial for BP Investors to follow as it can bring light to the mindset of many who still apply their outdated and antiquated strategies.
I'll bet everyone reading this topic will for now on (when possible) will round up or down though!
Check other offers for escalator clauses. This may be to bump someones offer, not bump an offer, or has been bumped with an oddball increment.
To all, before posting, please read the topic, then share your knowledge Here it is again:
NEGOTIATED SALES PRICE $754,498...and $98? Really?
Why would the price have not been negotiated up $2.00 to $754,500 or down $98.00 to $754,400, a round number?
Do you know how much chaos and extra time and effort throughout the loan process correcting the sales price and possible delays such a number can cause on the Mortgage side?
To all Investors: do yourselves and everyone on the mortgage as well as on the title side a huge favor and simply round your sales price up or down to the nearest round 100 number.
@Account Closed I don't think anyone is here to argue with you that some lenders might agree with your sentiment, but you are TELLING investors how to do business because it HELPS YOU..... what can you do for the investor to HELP THEM? This is a competitive arena.... most folks with good mortgage folks don't use others if they don't have to... WHY?- Because that person takes care of them, does business well, etc.... If my lender told me an oddball number was a pain for them.... pretty simple fix, I'd find another lender. Again, I don't operate in the lending/mortgage space, so can't speak to if your gripe is valid or not, but the borrower is your customer... don't like it, find another customer.
@Rich S., you are completely missing the point here as it is to HELP THEM.
Someone just emailed me saying...Steve, it's comical reading the posts on that rounding the price topic at the "resistance" of so many to do something so easy to better ensure their buyer's loan makes it through the Bank of America or Wells Fargo processing phase with the least amount of potential issues as possible"
As an investor of more than 20 years, I can say that I have never once given any thought to the mortgage lender when deciding the numbers to offer. If $748 makes sense, then I offer $748. I've made hundreds of offers without considering the lender's feelings about it, and will continue to make hundreds of offers without considering the lender's feelings. And I have an AMAZING lender that I work with exclusively. I work with him because he's fantastic, and closes when he says he will.
I don't give a frog's fat butt if it makes his job more difficult, and honestly, you have to do math anyway during the course of the loan. Literally you are inserting numbers into software. Why does it matter what those numbers are? Input them right the first time and you have no problems.
When dealing with sellers directly that is powerful negotiating tool by coming up with a number like $354,430 you convey a message that you are at your best number and that for a dollar more you can’t do the deal.
My lender wasted more time on a bad appraisal then they did doing math on my offer....
In fact I'd assume they probably waste more time doing things such as rebooting their computer or forgetting to hit send on an email....all of which have much greater chance of delaying my deal vs some math.
Originally posted by @Account Closed:
Listen, I am the King of the oddball number thing as for the last 20 yrs, I've made my Qualification letters oddball amounts and have had to argue with realtors all the time over why the letter is for example $804,117 purchase price vs. $804,000.
Or when the offer is being made for $750,000, why am I sending a letter for $804,117?https://www.biggerpockets.com/forums/552/topics/557953-negotiate-from-a-position-of-strength
"I'm the KING of using oddball numbers as a psychological negotiation tactic, but shame on you guys for doing it!"
I can see where you are coming from and you could have come here and politely requested that investors help make the process go smoother for everyone. Instead you came here and acted condescending, all the while looking like your process needs improvement. If I was doing business with you I would either move it elsewhere or send you oddball sales prices just to get under your skin!
BP Investors need to notice something as they read the posts on this topic and that is, most All of the post above are from people who:
#1 are not in the mortgage business
#2 have never been in the mortgage business
#3 have not been in the mortgage business in the past 10 yrs.
Why don't other lenders reading this chime in on this topic?
Because they're scared to post that what I'm advising is great advice.
And because they already know the depth of the backwards and antiquated mindset they see by so many posting on my topic discussion.
But they are High-Fiving me by email though
@Steve McRory - "And because they already know the depth of the backwards and antiquated mindset they see"
So when you use oddball numbers it's cool, but when buyers/sellers do it it's backwards and antiquated???
@Jeremy Z., why would you say Shame on us?
I do everything I can to give my Pre-Approved buyer/borrowers an edge on the completion and it has worked extremely well over the years!
Read this strategy and tell us what you think:
https://www.biggerpockets.com/forums/552/topics/557953-negotiate-from-a-position-of-strength
Yeah, yeah, yeah your email is being saturated with high fives from lenders because they're too scared to post on here that they agree with you, LOL.
Originally posted by @Account Closed:
@Jeremy Z., why would you say Shame on us?
I do everything I can to give my Pre-Approved buyer/borrowers an edge on the completion and it has worked extremely well over the years!
Read this strategy and tell us what you think:
https://www.biggerpockets.com/forums/552/topics/557953-negotiate-from-a-position-of-strength
Looks like my comment went right over your head.
Even with my BiggerPockets Super Powers, I have run out of Votes for @Brian Garrett on this thread.
@Account Closed I admire your fight but sorry but I'll pile on too. I am a very small private lender. My software consists of a spreadsheet and calculator. I have no problem with oddball numbers. Just an opinion from a lender.
I would be equally concerned with a misspelling of my name (I have a middle name and two last names, non hyphenated,all foreign).
Honestly I would hope the folks in the finance side are attentive to detail otherwise I'd assume they are in the wrong business.
Originally posted by @Kathie Riedel:
@Account Closed I admire your fight but sorry but I'll pile on too. I am a very small private lender. My software consists of a spreadsheet and calculator. I have no problem with oddball numbers. Just an opinion from a lender.
I am also a private lender, and don't care what the numbers are. I can wire any amount, regardless if the number ends in 0.
@Jeremy Z., no, it did not go over my head, read the original post.
I'm not saying this tactic is not a good one when negotiating, what I'm trying to convey is that when possible and after the final price is negotiated, why not step up and say something like this as a buyer's agent...?
...To all parties, we have agreed to a sales price of $800,002.19, but would it be okay if I were to lower my buyer agent commission by $2.19 to make it an even $800,000?
The reason that I'm willing to offer this $2.19 out of the $24,000 buyer agent commission is that I want to help assure my buyer's loan make it thru the loan process at Bank of America and feel that the $2.19 could possibly cause some errors during the loan process that could result in delays.