Don't ever negotiate from payment


By dodgerfanjohn   Follow   Wed, 21 Nov 2012, 9:51am   890 views   8 comments
In Los Angeles CA 90017   Watch (0)   Share   Quote   Permalink   Like (3)   Dislike  

Super standard sales tactic...and realtards LOVE for you to negotiate from payment. They want you to forget the total price you are paying, which will seem overwhelming, and just concentrate on that low monthly payment.

This is a horrible strategy for a buyer,and it applies to everything with the closest comparison for most people being the purchase of a car.

If you walk onto a car lot, one of the first questions a car salesman will ask is "what can you afford to pay each month?". The correct answer is to never ever disclose that. Just tell him what car you are interested in looking at. The key of course is that you did your research ahead of time, and you know what you are willing to pay and how much per month thats going to cost you.

Same thing with a house. You can let your REA know what price range and size specs and area you are looking at. You NEVER need to let them know how much you are willing to spend or what you can afford. Again you should have done your homework ahead of time and have a very good idea of what your ideal mortgage amount will cost, and how much you can afford to bid on a home.

The realtors here will argue this point until they are blue in the face. But they are wrong. An educated buyer already knows how much monthly mortgage he can afford and what price point that makes a house purchase. This will prevent the buyer from doing silly things like engaging in bidding wars by rationalize
"oh, 25K more? Thats only 150/mo more in mortgage" and similiar nonsensical things realtors try to get people to do.

Bottom line for a buyer is once they determine how much home their downpayment and monthly mortage payment can buy, that total number is what they should now concentrate on.

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  1. Kevin


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    1   10:46am Wed 21 Nov 2012   Share   Quote   Permalink   Like (2)   Dislike (1)  

    If you're already competent enough to understand the difference between your budget and the value of a piece of property, why are you using a regular RE anyway? Just use redfin.

  2. Oxygen


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    2   11:05am Wed 21 Nov 2012   Share   Quote   Permalink   Like (1)   Dislike  

    There's another sales tactic: "up to?"

    http://www.edmunds.com/car-buying/confessions-of-a-car-salesman-pg4.html

    The process begins by asking the customer how much they want for a monthly payment. Usually, they say, about $300. "Then, you just say, '$300... up to?' And they'll say, 'Well, $350.' Now they've just bumped themselves $50 a month. That's huge." You then fill in $350 under the monthly payment box.

    Michael said you could use the "up to" trick with the down payment too. "If Mr. Customer says he wants to put down $2000, you say, "Up to?" And he'll probably bump himself up to $2500." Michael then wrote $2,500 in the down payment box of the 4-square worksheet.

    I later found out this little phrase "Up to?" was a joke around the dealership. When salesmen or women passed each other in the hallways, they would say, "Up to?" and break out laughing.

  3. YesYNot


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    3   12:45pm Wed 21 Nov 2012   Share   Quote   Permalink   Like (7)   Dislike  

    A Realtor once asked me, "What's another $6,000? That's hardly anything per month."

    I told her it was end of life treatment for my cat, and asked her if she was trying to kill my cat.

    The other option: "I'm glad you feel that way. We can just take the $6K out of your commission. Thanks for making it so easy."

  4. Landru3000


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    4   2:51pm Wed 21 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Why not? I'll never pay it off anyway. My payment's way low. Percentage wise, I negotiate the lowest cost of living possible, on a monthly or yearly basis.

  5. dodgerfanjohn


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    5   3:14pm Wed 21 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Landru3000 says

    Why not? I'll never pay it off anyway. My payment's way low. Percentage wise, I negotiate the lowest cost of living possible, on a monthly or yearly basis.

    I don't understand what you are trying to say here.

  6. EBGuy


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    6   3:34pm Wed 21 Nov 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Refies also present seductive alternatives that can be hard to pass up. More money in your pocket (lower monthly payment), but you're not thinking about that fact you'll need to work for five more years. Speaking of which, I can go from my 20 year (1 year in) to a 30 year, taking out $100k, and still have lower payments. I then take the $100k to the casino -- what could go wrong?

  7. Kevin


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    7   8:42pm Wed 21 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    robertoaribas says

    say 12k mileage a month

    What?

  8. dodgerfanjohn


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    8   9:08pm Wed 21 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    robertoaribas says

    If somebody wants to lease me a new bmw 3 series for $250 a month, 4 years... nothing down, say 12k mileage a month, and no turn in fee... I'll negotiate from payment!

    Obviously we are not talking about renting in this thread.

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