Buying a home is by far the biggest financial decision you’ll make, and it’s also the most stressful one. It isn’t an easy task; so how willing are you to do the work? It can be a long process. You can spend years saving for a down payment, many months looking for a home, and several weeks trying to find the best mortgage. However, after all is said and done and you find the home of your dreams, the work is far from over!
You found the home and now it’s time to make an offer. This part is not to be taken lightly because it’s an investment. Once both parties agree, you have a binding contract. Your real estate agent will do his/her research and follow these important tips and make suggestions to you when negotiating.
Negotiating the Deal:
1. Pull comparable properties. It’s important to back up your offer with the facts. Comparable sales data is strong! If you’re thinking of presenting a low ball offer then you could potentially be making a big mistake! This drastic action may cut you out on any chances at buying the home, especially if you insult the seller. You may not hear back from them again. It just makes sense to be cautious and factual.
2. Don’t fall in love with the home! It’s okay to really like the home, but not to the point where it clouds your decision-making skills and judgement. This could cost you tens of thousands of dollars. Also, be discreet with how you feel because you don’t want the seller to have leverage over you when negotiating. Remember, even if you do find the perfect home, you want to get it for the best deal.
3. Research property and owners. People put their home up for sale for various reasons. Some like to cash-in on their built up equity while others may need to downsize/upgrade, and some do it out of necessity ~ financial hardship or new job. You can’t obviously get this information directly; however, a real estate agent can look at the history of the property, which may include how long it’s been on the market, any price reductions or increases, etc. This information is helpful because depending on how long the listing has been on the market and number of price changes during a given period of time whether short or long, can be clues to the sellers urgency, motivation to sell, or lack there of.
4. Negotiate more than price. There are other items that are negotiable in a real estate transaction. Price is only one of them. For example, asking for a home warranty, if one is not offered, is a must when buying a home. You may like the big screen television, the armoire, the playset, or washer and dryer. Negotiate those items. When buying a home, make sure you get what you want at a price that’s right!
5. Put yourself in the sellers’ shoes. We all want a good deal these days! However, imagine that you are the seller. How would you feel if it were your home and you were given the offer? Is it ridiculous? Is it lowball? Is it realistic? How would you react? Sometimes empathy allows us to put things into perspective.
To sum it all up, buyers should really put major efforts into placing value to an offer when negotiating. Once you find the home, you’re just getting started! Happy negotiating!