While the stated purchase price of a home in Staten Island, NY is the starting point in an offer to purchase, other details of the offer determine the true costs to the buyer and the true proceeds to the seller. These details, along with the price, become points of negotiation.
The most obvious, common, and costly detail is the request for the seller to pay the buyer’s closing costs. Depending upon the loan program, this could equal as much as 9% of the purchase price. On a home valued at $300,000, paying buyer’s closing costs would mean a $27,000 reduction in proceeds for the seller – and a $27,000 savings for the buyer. Then there are the inspections and the repair allowances. Buyers usually pay for the inspections, but they can ask the seller to pay these costs. Every purchase offer should include a set figure that the seller agrees to spend on repairs, if required. This figure must be deducted when the seller is looking at net proceeds. And then, if more expensive repairs are needed buyers and sellers must either return to negotiations or let the transaction die. But those aren’t the only factors that can affect the buyers’ or the sellers’ finances. Timing can also play a role. If the buyer is leaving another home or the seller is buying a new home, the closing/possession date can save or cost them dollars. Think of the cost of putting your household furnishings into storage and renting temporary shelter in the interim between closing on one home and moving into another. Next, look at what’s included in the purchase price. Kitchen and/or laundry appliances may already be included per the listing. If not, the buyers can ask for them. Inclusion saves the buyers money, while it may cost the sellers to replace them in their new home. So even though these items are not given monetary value on the purchase offer, they do have value that both parties need to consider. The same is true for items like a riding lawn mower. The seller may not need one in their next home, but leaving it behind does add value for the buyer. Whether you’re buying or selling a home here in city, before you focus on the stated purchase price, look at the true price. You’ll see it after you make the additions and subtractions. If you have questions about these costs and how they affect your bottom line, call me at 917-202-8309 or drop me a note at John@JohnMartelotti.com. I’ll be happy to speak with you. And when you’re ready to buy or sell a home, it would be my pleasure to guide you through a smooth transaction.