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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.
@Account Closed The issue here is you want someone to make your life easier, but there is no competitive advantage for them to do so. If the federal government came out with a policy that all real estate must be purchased with round numbers, that would be your only way to get this point across. You might have a point, but it is easily snuffed out with "you want it to be easier" when the service you think you are providing investors with a smooth transaction, by purchase prices with round numbers, can be done by thousands of lenders no matter what the digits are. I'm sure all the fees and taxes are perfectly round numbers too, right???
@Account Closed how about the lender provides a credit to a rounder number? And the change in contract is MORE WORK for those parties, but that is ok, because it makes life easier for the lender, right? I'm not going to lie, I always want my life to be easier, but you are asking others to change when there is no direct reason to, since they can get what they want without changing. If a lender can't handle the digits, I think there is more of an issue with the lender and process than anything else.
Again, NO Mortgage industry people (who are under Dodd Frank Act, and private lenders loaning on non TRID , investment properties no included) are responding.
Why, because they ALL know I'm right, they just want to avoid the backlash posting it.
And, also likely because they are all working right now too.
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
Only 1% of 1% are intelligent enough not to have a ton of zeroes in their offer. This can't be something you see everyday.
I have never settled on a nice round number as a buyer. When you write out seven hundred eighty-six on the offer it leaves them no room to counter unless they chicken scratch it in the margins. But I use cash or SF most of the time so don't worry.
Originally posted by @Mindy Jensen:
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.
I once did a contract for decent sized order of a about 50+ line items... Vendor went out to the third decimal place, my software only 2.
I was off a few cents and spent far to long trying to figure out why... Double, even triple checking ea line and quanity etc. Ended up having to do 1 lot and then type out the entire quote haha.
These posts are actually amusing for Mortgage Industry people to read at just how out of touch they are with reality and all the stupid mistakes that go on behind the scenes at Banks during the loan process and U/W.
Yes, there are no Mortgage Industry people responding to this Topic advise, but there are also No Mortgage Industry people disputing this advice either.
Their silence on this subject says it all!
Or you know, you could just stop fat-fingering the sales price when you punch in the numbers.
Again, I kind of see where you are coming from, but your approach could definitely use some work!
Originally posted by @Account Closed:
These posts are actually amusing for Mortgage Industry people to read at just how out of touch they are with reality and all the stupid mistakes that go on behind the scenes at Banks during the loan process and U/W.
Yes, there are no Mortgage Industry people responding to this Topic advise, but there are also No Mortgage Industry people disputing this advice either.
Their silence on this subject says it all!
Maybe their silence is due to embarrassment over all the mistakes the underwriters and loan officers are making (according to you).
@Jeremy Z. YES!! YES!!
Mistakes that so many on the lending side make to include, but not limited to Mortgage Brokers, Loan Processor, Account Reps, U/W, Compliance set up and about 20 other humans that touch these files during the loan process, who make mistakes that cause delays!
You're stating to catch on with what I'm trying to convey to BP Investors on this subject and why they should round up or down!
Nice try.
I've got a better idea. Work with your industry to get their **** together so that a stupid typo doesn't hold up closing for three days.
@Jeremy Z., I here ya loud and clear!
I've been sending letters to Chris Dodd, Barney Frank, Obama and the CFPB expressing the same frustration with the Mortgage Industry, but without success so far.
Ha, I was waiting for you to go there. Typical.
I opened a savings account at my bank within the last year and the application asked if I bank with any other banks. If I said "yes", the application required me to give them the names of those banks (I assume for marketing purposes). The banker seriously couldn't submit the app without me giving that info, or lying and saying I don't bank with anyone else. They tried to blame that on Dodd-Frank too.
That's off-topic, but it really hacks me off so I decided to vent.
Originally posted by @Account Closed:
@Jeremy Z., I here ya loud and clear!
I've been sending letters to Chris Dodd, Barney Frank, Obama and the CFPB expressing the same frustration with the Mortgage Industry, but without success so far.
Your donations of whole numbers were found to be too low and not acceptable.
Increase your donations for better response rate...
Maybe Chris Mason or Joe Stretch (both lenders the CA Bay Area) wouldn't mind commenting here. I would be interested in hearing their opinions.
I too can see the value in making nice rounded offers - not sure if that value outweighs my own set of negotiating tactics - but it is something to consider. I feel that if I have the right team in place (this means a competent lender/broker) this shouldn't be a problem 99% of the time.
@Account Closed could work on his delivery. This stuff is only personal if we make it personal.
Again, complete radio silence from all mortgage industry people on this topic which means one thing and one thing only, they all agree.
All comments above on this topic are from NON mortgage industry people.
Hey, what about the resident(s) title agents on BP? Wonder what their thoughts are on rounding up or down on the final sales price.
They're the unsung heroes behind the scenes who so often have to deal with so many incompetent morons at the banks, who make non-stop mistakes, they'll agree with me too.
Originally posted by @Account Closed:
I'm completely aware of the tactic as $99,995 or $9,9999.99 looks a lot better than $100,000 and is why everything at Walmart and on used car lots are priced this way.
But on 3/4 of a Million dollar home, a $2.00 difference in a negotiating strategy is not going to kill a deal, but given the problems it can cause on the lending side, it's foolish to actually settle on such a final number.
A buyer's realtor or Listing realtor can always show how smart they are after there is a deal by saying...
..."To better insure a smooth mortgage loan process for the buyer, I'll pick up the $2.00, so we can round up to $754,500 even."
I'm curious why a round (to the 100 place) would make it easier to calculate anything? You're plugging these numbers into a loan calculator that spits out a payment amount. And that payment amount is likely to be something like $1,429.54 (not even, all the way to the penny), regardless of the roundness of the starting value.
Why do odd number sales cause more work?
I honestly wish to know.
Why would typing 754,498 be more work than typing 754,500?
Am I missing something?
I want to make everyone who I’m involved with life easier, including my mortgage broker - can you help us understand your logic?
Originally posted by @Account Closed:
@Brian Garrett Okay, then I guess it doesn't make sense to you, an experienced realtor, so you'll stick with your ways.
But if given this info in advance, how many of your buyer/borrowers would feel that rounding up $2.00 would make sense?
I'll bet 99% would agree with rounding up as a no brainer, effortless way to avoid unintended delays.
Sorry, but if not having a round (to the 100's place) is going to cause a delay with my lender, I'm not using that lender. I just bought a property that was over $6m, and it wasn't rounded in any way.
Originally posted by @Account Closed:
But I'll bet most reading this post will round up or down for now on!
That's unlikely. It's more likely that people reading this would decide against using your services. I'll do my deals down to the penny. I've never had a delay because of it or a lender or title company bring it up.
@Account Closed I was a lender for 4+ years and I do not understand the beef..... you literally change the purchase price in the system by typing in a different purchase price...... 10%, 20%, etc. is not hard to figure out and if you and your team can't make the loan work based on WHAT YOUR CUSTOMER is wanting to pay, then there is a bigger problem..... Customer's are pre-approved, and they will and can offer any price they want. I used to have a ton of Chinese buyers who believe in certain "lucky" numbers, and who am I to tell them what to offer?? Mistakes can happen with any number, but I have never and it should never affect or push back a closing date??????
@Josh Mitchell, Okay, please share with us when you were a lender for 4 + years?
And what banks did you work for?
Originally posted by @Account Closed:
@Josh Mitchell, Okay, please share with us when you were a lender for 4 + years?
And what banks did you work for?
Steve, I try to be positive on here. But dude, take my word for it, you're coming off really really bad. I know you may not care, but these are your potential customers. Or at minimum people you might network with on a friend-of-a-friend basis.
Just take the loss and move on. Even if you think you're right. There is an old saying that goes "I'd rather be rich than right". Meaning even when you think you're right, if it gets in your way of being successful, you sometimes need to move on.
@Cody L., or... maybe it weeds out the undesirable potential clients, so I can focus on reasonable, like minded, common sense clients?
They read these posts from the establishment BP posters and contact me because of how I respond.
But that doesn't matter as I do this for fun and to hopefully help the reasonable common sense investors make more money.
Maybe I should take my act on the road and do seminars on Real Estate Investing Strategies, you think I would do well?
@Account Closed In regard to your idea that investors just don't get it, but when the mortgage folks start chiming in, they will... just doesn't matter. Investors will start caring when they can't find a lender who will work with them because they didn't use a round number. I think to an investor, it is like getting excuses from a general contractor of why work can't be done or if they say, "You know, if you did this, it would be easier for me"... but in reality, there is another contractor who will do the same work, who doesn't need the investor to do this or that and for the same price.... and then the contractor saying, "Just wait until all the other contractors start chiming in"... etc... bottom line, even IF it makes it so much easier, the folks you are trying to convince just don't care. They are too busy solving their problems instead of trying to fix yours. Like I said, you may have a point, that it is more work and leads to more issues, but the bottom line is, that is YOUR job to fix, not the investors/buyers/whomever...