Negotiating the home purchase requires different strategies. Nearly, everyone has his or her own negotiation approach as seen from the multiple books written on this subject. You may not find a wrong or right technique for negotiating, provided you have the fundamentals down.
The major difference when it comes to negotiation is the ego and personality of the parties engaged in it. That said, I thought of jotting down the best home purchase negotiation tips that have worked for me over the years in the real estate business.
Excellent Tips for Negotiating the Home Purchase
Here are several tips to help you negotiate the cost of that house down.
Be Armed with Information
In most cases, buyers make offers to purchase homes without considering the wants or needs of sellers. Through asking more questions regarding the situation of the seller, a buyer and his agent will be able to know the key elements of the deal that will best enable them to get approval for a lower price. Apart from gathering more facts about the seller, you also need to find more details regarding the personality of the seller and his selling agent.
While this may sound like extra work, obtaining such information will give the buyer more insight on what motivates the seller. To get this information, you may need to ask questions such as: How did the seller come up with the asking price?
When, where and why is the seller planning to move? Do they have a defiant, competitive or cooperative personality that expects a win-win transaction? Finding answers to these queries will help you to structure the offer in order to reach at a highly favorable selling price.
Approach the Seller in Person
During those good old days, before the introduction of emails and fax machines, buyers could present their offers directly to sellers or their agents. Research from real estate experts shows that presenting your case in person to the seller really increases the possibility of him accepting your offer. However, if you have your agent, you should train her or him to approach the seller in person.
Elaborate the Value of the Offer to Your Seller
You can vividly explain the offer’s value if the value is actually there; the value is not always related to the offer price. A number of other considerations may also cause the seller to give in and lower the cost. These include a longer or quicker closing date, a bigger earnest deposit, a different form of financing, and fewer contingencies. Evidence obtained from market analysis indicating that the price is below the asking price will also enhance your offer during the negotiation.
Do not Share Excessive Information
When shopping for a suitable home, avoid sharing excessive details with the potential seller. For instance, if the seller realizes that you find his home to be extremely glamorous, they may not be ready to negotiate and lower the cost. Besides, it is imprudent to contend that you are in haste to get a home or some other reason regarding your reason for intending to buy the home. Doing this may give your seller a major advantage.
Walk Away When You Should
In the negotiation process, it is essential that you know your limits and know when you should walk away from the deal. Do not allow your emotions to overtake the process until you become ready to pay more than the actual cost of the house. If your seller is not ready to cooperate in terms of negotiating the price, then you should consider walking away from the entire deal and search for more options.
Work with the Buyer’s Agent
It is quintessential that you work with an exclusive agent. His duties are to uphold your interest and protect you during the home purchase transaction. The agent will elaborate to you the terms of the contract. Essentially, the agent can negotiate such that you pay for the lowest buying price for the home that you plan to buy.
When looking for the agent, consider their certification, experience and any other real estate credentials. You need to engage someone competent enough to help you negotiate aggressively and buy your dream home.
Be Well Prepared
Before engaging into negotiation, study the market so that you present your offer based on the latest market prices. You should find out any homes recently sold in the same area or nearby and compare those with the house you intend to buy. You should then compare selling and asking prices of those houses. If you do this, you will know the right offer to make.
Moreover, prepare the funds too. That way, the seller will certainly take your negotiation seriously when you present the offer. You also need to get ready for making counter offers. While sellers want great value for their houses, they may not have an upper hand. If you realize his price is unrealistic, you should be prepared to consider another option.
Know the Condition of the House
Before the negotiation, inspect the house and know what requires repair and the possible prices. For example, if the house requires painting or a new roof, you need to raise this to your seller and convince him to make possible deductions for maintenance. You can compare the house with other homes that you know and that way, the seller will know that you are considering other homes as well.
Do not Show Your Interest in the Property
Moreover, do not get attached to the house in any way. Try as much as you can not to show your seller that you have fallen in love with the property. Some sellers can really sense when a buyer is so interested in buying their home and if they sense that, negotiating will be a harrowing experience.
Generally, succeeding in negotiating when buying a home requires that you prepare thoroughly, come with the buyer’s agent, know how to approach the seller, do more research, and be ready to walk away.
If you observe all the tips explained in this here then your chances of winning a negotiation for a new home will be high, as you will certainly convince the seller to accept your offer.