Once you find the home of your dreams, you might want some negotiating tips for buying a home.
Negotiating Tips for Buying a Home
Buying a home will require some negotiation in order to come to an agreement over price. Depending on the market, you may be able to get the price down or to get some reasonable concessions. To best use your negotiating tips for buying a home, it is key to be open-minded but prepared.
Investigate the Offer and the Seller
The first step in preparation is to know as much as possible about the home, the neighborhood, and the seller. Knowing this information can help you develop an offer that if both beneficial to you and likely to be acceptable to the seller.
A few questions that you and your real estate agent should find the answers to:
- What is the asking price? Is this similar to the prices of other homes in the neighborhood?
- How long has the home been on the market?
- Have there been any previous offers? Why did they fail?
- Has the price been lowered on the house?
- Is there any urgent reason for the home sale?
- When do the sellers need or want to be out of the home?
Your agent can help you find the answers to these questions but there are also websites like Trulia.com or Zillow.com that can provide information as well. Make sure that your agent is representing your interests and not trying to maximize his or her commission.
Be Prepared to Make an Offer
Once you gather your information about the house and the seller, you need to make sure that you are financially and emotionally ready to negotiate by:
- Getting preapproved for a loan
- Saving a down payment
- Having your financial obligations in order
- Having a range that you are willing to spend and stick with it
Most importantly, you must use your poker face. You need to be prepared to let the house go if the price is not within your range. You can't let the seller know how badly you may want the house, which makes it difficult to negotiate. A key to good negotiating is the ability to walk away.
Present a Fair Offer
You should present a fair offer to the seller. It does not have to be the asking price, but you should not insult the homeowner with an unreasonable lowball offer. This generates mistrust from the beginning. The offer price should be based on the prices of other homes in the neighborhood and the information that you gathered about the house; it should be reasonable and should be backed up with facts.
Leave Room for Negotiation
You should try not to appear too unyielding when presenting your offer. A "take-it-or-leave-it" attitude does not often work and may establish an air of hostility from the beginning.
You also should try not to get bogged down in the inconsequential issues. Many negotiations fall apart over tiny squabbles that may only amount to a fraction of the home cost. Keep your eye on the big picture.
Put It in Writing
Although you may negotiate verbally up front, it is important to get everything in writing. In many states, these agreements must be in writing to be legal. Having the terms of agreement in writing makes sure that everyone recalls the terms of the deal.
Some negotiators suggest that you include a personal letter to the seller along with your offer. This letter can present the case that about why you want the home and how much your family would enjoy living there. This tactic may put a personal face on the offer and can help the seller look at you as a person instead of as an opponent.
If there is an area during negotiations that appears to be a sticking point and is a more minor issue, sometimes it is helpful to work out all of the other details and then return to the area of disagreement. This may improve the area of compromise and allow the parties to close the deal.
The art of negotiating is not hard and fast and can be learned. Using the negotiating tips for buying a home that are available to you while also remembering that the seller is another human being with feelings can make the negotiating process more successful. It also may help you get the home you want at a price that you want as well.