Home Buying Tips
Negotiating Saves Money
Negotiations can be stressful, by using these home buying tips negotiating will be easier.
Home Buying Tips - Negotiating a Good Deal
1. Ask your real estate agent to prepare a Comparable Market Analyses (CMA) so you can decide on a fair price. Compare Prices. The more you know, the more control you will have over the negotiation process. Compare the sales prices on similar houses in the area, checking both active listings and homes that have recently sold.
2. Learn about the seller. Knowing a little bit about the seller could give you some negotiating power. Do they need to sell quickly because of a job transfer, a family situation, or an offer commitment on another house?
3. Length of time on the market? In a buyers market, a seller is more likely to negotiate or accept a lower offer if the house has been on the market for a long time or if there are a lot of houses for sale in the same area. Sometimes it may pay to go back and look at inventory that has been on the market for a while. Some of those sellers may be more ready to look at an offer.
4. Everything is negotiable. It is not just about price. These points are often negotiated in a contract
- Closing Costs (title insurance, closing agent)
- Inspection of house
- Repair Limits
- Closing Time
- Escrow Amount
- Financial Contingency
- Homeowner's Association Dues and Assessments
4. Make a clean offer. If you really want the house, we recommend that you present a strong, clean offer. Don't waste time making an offer that will probably be rejected. You do not want to offer full price, particularly in a buyer’s market, but you also do not want to make a low-ball offer and insult the sellers so they don’t want to work with you.
This means that you ask for what you want, but avoid including a lot of little contingencies that could lead to multiple counter offers. The more times an offer is countered, the less control you, as a buyer, have. By making your first offer as tempting as possible, you are more likely to get what you want.
5. Ask for Credit There may be a few things about a home, such as carpet or woodworking, that you just don’t like, and it could be quite costly to make the changes, improvements, or updates that you want. In some cases, you could ask for a credit to help cover these costs. Any credits negotiated in the contract are applied at closing.
6.Know your limit. Before beginning negotiations, decide on a maximum price that you are willing to pay for the home and don’t go over it. If you cannot get what you want and still stay within your budget, then you need to be willing to walk away. There are plenty of other homes out there, so do not give the seller the impression that your price cap is flexible.
7. Put everything in writing. While some negotiations should be done in good faith, it is a fact that not everyone recalls everything, and not all discussions are remembered accurately. It is important to put everything in writing because you don’t want to agree on something and then have it disputed later, especially if it is a deal maker or breaker for you.
8. Time limit for a response As the buyer, you decide how much time you are willing to give the seller to respond to your offer. We recommend giving the buyer 24 hours to respond. You want to create a sense of urgency.
You have less negotiating power if you are buying a bank owned property. Read about home buying tips negotiating on Bank Owned Properties.
We continually update this site. Please click the RSS feed to be notified when we update home buying tips negotiating a good deal.
Have we answered your question? If not, ASK US! See our list of home buying questions.