A Basic Guide to Home Price Negotiation
Posted on Tuesday, January 31, 2017
Are you falling for a home? When you're buying a house, be sure to do your negotiation homework.
You're buying a house. How do you get the best possible deal? If you're no expert negotiator, you need to train yourself for the day that you'll step into that negotiating role. These tips will help you secure your dream home and negotiate the best deal when you're making an offer.
Look at the Market
Do your research before you come in with an offer. Ask your real estate agent about the sales prices of comparable homes with similar features in the neighborhood. Note where the home that you like is different and similar. Use this information to create an offer that feels like it's in line with what the market has been offering for similar homes.
Understand Your Offer
If you're working with a real estate agent, that person will be able to give you guidance as you work to understand the offer. A purchase offer is a written contract which includes a deposit that shows that you are committing to purchasing the home. The offer shows the amount that you are willing to give for the property. A real estate agent will have standard forms to help you make an offer. If you're seeking a home independently, you'll need to be aware of local laws that control what information you should have in your purchase offer. When you're working through an agent, keep it consistent. Make your offers and receive your counteroffers through your agent.
Research other properties in the area to understand what you should offer.
Use an Offer to Glean Information
According to Credit.com, "you might be able to get insight into the seller's willingness to negotiate by making an offer and seeing what the seller comes back to you with." Use your offer to glean more information about the sellers. Do they want to sell quickly? Do they have a minimum price that they must meet in order to move? If your seller returns to you with a price that's under the listed price, you know that they are motivated to sell.
Don't create a low-ball offer, unless the house is obviously overpriced. Sellers are people too. While you may want a deal, the sellers probably have an emotional connection to the house, and they want it to go to a good person. If you give a low-ball offer or insult the seller in some way, the seller may be less willing to negotiate or to do business with you.
Be Prepared to Walk Away
Getting invested in and excited about a home is all part of the buying process. However, if you divulge this to the sellers, they'll know that you're in love with the home. Be canny and be ready to walk away from the deal if necessary. Remember that there's always another house around the corner. Desperation does not lead to strong negotiation.
Get Ready for Your Counteroffer
After the offer comes the counteroffer. This is when you need to be quick on your feet. According to HGTV, "delays in responding leave space open for another buyer to step in and create a bidding war, or even more likely, for the seller to perceive that other serious buyers might be out there." Even before you make an offer, know what you're willing to consider in a counteroffer.
Know Your Financial Limit
Make sure that you understand the financial implications of your offer. If your offer is slightly above the original price you planned to pay for a home, understand that this can have long-term financial implications for your family. Know what you can afford, and stick to this.
At Open For Homes, we're open for business. We're here to serve you as you look for the best home for your family. Search our properties today to find your dream home.