When you realize how to outbid the competition requires more than just the purchase price, you look for places where you can take advantage. No one thinks of this idea. If you use it, a seller will undoubtedly take notice. The Seller’s attention is what you want, and forcing all other buyers to beat you is the way you want the conversation to go.
Property taxes that accrue from January 1 through December 31 get prorated at closing. Assume the annual property taxes for a house will be $7,000.00. The monthly proration is $583.33. To close on February 28 there will be $1,167.00 in taxes due. The standard language of your real estate purchase agreement might call for the Seller to pay taxes from January 1 to the day of closing. That’s a negotiable item.
Buyers who have cash on hand advantage can consider changing the contract from Seller paying to buyer paying the two months of taxes. For the small price of $1,167.00, the return could make the difference. Remember, the price is where the attention is, until the Seller looks at selling expenses. An owner decides between one offer and another by comparing Net Equity and the commitment of the buyer. (Security of getting to closing). Increasing the Seller’s net equity this way has an exponential positive impact on the buyer.
- Grabs the attention of the Seller because it’s unique
- Causes the Seller to see your offer beats the others on this point
- When you have what they don’t they don’t look as good as you
- You just gave the Seller a gift of $1,200
- Let’s the owner feel they were clever negotiators shifting their bill to you
- If property taxes are deductible on your tax return, you get the write-off
The difference between first and second place is most likely minimal. Any advantage might be enough to put you in first place.