One of the oldest sayings in the real estate industry is that ‘everything is negotiable’. As a Real Estate Professional, I couldn’t agree more. If you’re interested in buying a home, you would certainly be hoping to find a property at the best price and terms. For this, you need to know when to start negotiating with the seller and when to stop and more importantly, how to go about it. And that is what this post will teach you.
If you have found your dream home and you wish to buy it, then the first thing you need to remember is to stay calm and keep your emotions intact. Buying a home is a big deal. No matter how excited you are, do not let your emotions get the best of you as you might not be able to negotiate the best terms and conditions for the property you are interested in buying. Consequently, you will end up buying it at a higher price.
When buying a home, here is how to negotiate like a pro:
- Review Comparable Sales and Then Negotiate
Based on my experience as a Real Estate Professional, I’d recommend you to review comparable sales of properties in that area before making an offer. This will help you to determine the validity of the house’s asking price. In simpler terms, this step can help you make sure that the asking price is reasonable based on the current market conditions.
Assessing comparable sales requires you to evaluate similar homes that have been sold in the neighbourhood recently. By looking at their selling prices, you can negotiate a better deal with the home seller. Simply stated, comparable sales are the most effective tool for negotiating the price of a property as you will know the current market value of the house as compared to the other properties sold in the area. This will further help you to shape your offer and negotiate the property price accordingly with confidence.
On the other hand, it will show to the seller that you have thoroughly researched the home prices in the area and that you know what you’re talking about. Also, you can refer to the comparable sales to justify your offer amount.
- Have a Maximum Amount in Your Mind
When negotiating the price of a property up for sale, you must have a clear idea of the maximum amount that you’re willing to spend on it. This amount should be based on your pre-approval. For example, if you have a pre-approval for $275000, then you should not negotiate more than that as it will make it difficult for you to pay the price.
- Know the Real Estate Market
Another crucial aspect that you need to consider when negotiating a house price is the type of market you’re in. By this I mean, is it a buyer’s or seller’s market? The type of market can make a significant difference to your negotiation power and performance. Generally speaking, in a buyer’s market, you will have the upper hand as it indicates that the properties are selling slowly. Therefore, you can negotiate more aggressively as you, the buyer, will have more leverage in such a market. And since there are not many buyers to purchase the listed properties, the seller will be willing to negotiate and show flexibility towards the offer made to them.
However, if it is a seller’s market, then the situation can be quite different. In such a scenario, you need to be very careful with the seller’s counteroffer. After all, you can’t go back and forth with a seller in the seller’s market as they have plenty of offers to choose from. If you do that, the property could slip through your fingers. Therefore, you need to have a solid understanding of the market so that you can negotiate accordingly.
- Ask for Repairs and Contingencies
Although contingencies protect the needs of home sellers, they also give buyers plenty of opportunities to negotiate a lower purchase offer. So, when you’re writing your offer, you will get a chance to include the contingencies that you want, apart from the standard ones.
These contingencies will give an ample amount of time to examine the property that you’re planning to purchase and will also give you leverage in case you want to negotiate repairs during the closing process. If you’re through with the home inspection and contingencies, it can most certainly give you negotiating leverage before the deal is closed.
Apart from that, repairs also give you room to negotiate both as you are making an offer before finalising the deal. In case the home requires a significant amount of repair work to bring it to today’s standards, then you can ask for repairs when making your offer.
Also, if problems are unravelled during inspections, you can also negotiate to either have them fixed or reduce the price to cover the cost associated with repair work. Furthermore, negotiating repairs can help you to save thousands of dollars.
However, it is important to note that if the seller states that the home will be sold as it is, then they are indicating beforehand that they will not be willing to negotiate repairs that might be required.
- Learn About the Seller and Why They Are Moving
Another useful tactic to negotiate better is to learn about the seller. That’s right; the more you get to know the seller, the better you can strategise and tailor your offer. In order to do this, here’s what you need to do: find answers to questions like:
- Does the property seller already have a new place and is looking for a quick closing deal?
- Will the seller prefer a longer closing or even a rent-back agreement?
- Is there divorce involved?
- Is the seller the party to a divorce proceeding?
- Is the house in foreclosure?
The more information you have about the seller, the better strategy you will be able to put together. Therefore, focus on collecting information about the property, its location and neighbourhood and the seller. The best way to go about it is to use different tools available online to research the neighbourhood, but this requires time and patience.
If you want things to be done quickly and smoothly, then consider hiring a qualified and experienced Real Estate Professional like me. I have a solid understanding of the real estate market and a wide network, which enables me to provide quality information and assistance to both home buyers and sellers.
Not only can I provide you with proper market research about the home and neighbourhood that you have in mind, but as a CNE (Certified Negotiation Expert) I can also assist you with the negotiation process. I will use my skills, knowledge and experience to help you negotiate the best deal for your dream home while ensuring that it is within your budget. For more information or assistance on home buying or selling, contact me today.
Allow me to help make your home-buying journey as smooth and stress-free as it can be.