You’ve spent months looking at listings and then one day, you find it: the perfect home in the perfect neighborhood. Problem is, there’s just one catch–the asking price is outside your budget range. While you could just move on, you shouldn’t count yourself out until you’ve flexed your negotiating muscles. Haggling over a home isn’t always easy, but it can be worth it when done properly. If it’s your first time jumping into the home-buying rodeo, here are some tips for becoming a master negotiator.
1. Take The Temperature of the Market
Before you attempt to negotiate anything, you need to know what kind of position you’re starting from. Negotiating in a buyer’s market is very different from wrangling a deal in a seller’s market. If the odds are in favor of the seller, for instance, you’re going to have less wiggle room when it comes to snagging a home below asking price. On the other hand, if homes are selling at a slower pace in the area you’re buying in, that can give you a little more leverage at the bargaining table.
2. Base Your Offer On The Home’s Value, Not The Sale Price
What a home is worth and what it sells for are two separate things and you need to know the difference before you make an offer. If you don’t mind spending a few bucks out of pocket, you can request an independent appraisal first to make sure what the seller is asking matches the home’s value. It’s also a good idea to look at the home’s history to see how many times it’s been on the market, how it’s value has changed over time and what it’s sold for in the past.
3. Know What Your Sticking Points Are
Virtually anything is up for negotiation during a home sale, but you have to be clear on what you are and aren’t willing to compromise. If, for example, you want the seller to pay a certain amount towards closing costs but you also want them to make some expensive repairs, you may be forced to decide which one matters more if they decide to play hardball. Having a short list of things you don’t want to budge on and a longer list of things that are flexible ups the odds of getting (most) of what you want.
4. Scope Out The Pending Offers
The last thing you want when you’re trying to snag your dream home is to end up in a bidding war. If the property you’re interested in already has a pending offer that doesn’t mean you don’t still have a shot at it. Ask your agent if they can get the details of the offer. Chances are if you can come up with something better, the seller might decide to accept your terms over another buyer’s.
5. Check The Competition
If the home you want to buy is in an area where there are lots of other properties for sale, that can be your secret weapon for forming an offer. Look at homes that are similar in size and age to the one you’ve got your eye on. Then look at what it’s selling for. If you notice the comps are priced quite a bit lower, that can be your in for opening up the door to a better deal.
6. Don’t Drag Your Feet
Negotiating is a delicate art and when a home is attracting a lot of interest from other buyers, you can’t just sit around on your hands. You should be ready to move quickly while keeping your focus on what your bottom line asking price is. If you hem and haw over a minor detail in the contract terms, another buyer could come along and scoop the home right out from under you. That’s the last thing you want to happen if you want to keep your home-buying dreams alive.
[…] of the best tips for negotiating a house purchase is to know what a home is worth. The value of the home and what it sells for are two different […]