Unless you decide to pay full price for your dream home, you will need to negotiate a price that is acceptable to both you and the seller. Your real estate agent is experienced in negotiations, and it makes sense to involve the agent every step along the way. Sometimes emotions run high and one little misstep can make negotiations difficult. Fortunately, there are some tips you can follow to make the negotiation process for buying a home as quick and easy as possible.
Tip #1 – Know the Market
Find out as much as you can about the market before you go into negotiations. Your real estate agent can help out by providing a Comparative Market Analysis with a full MLS listing of the prices of comparable homes in the area that have sold recently. Look at them all, and you decide which homes are truly comparable to the home you wish to buy, and you will have a better idea about how much to offer the seller.
Tip #2 – Be Reasonable
Remember that you are trying to come to an agreement with the seller, and presenting a fair price for the home based on market conditions can generate goodwill that may ease the negation process. If you lowball with a price that is substantially below the asking price and out of the range of comparable recent sales, you may irritate the seller to the point where he refuses to counter your offer, or refuse to deal with you at all.
Tip #3 – Respond Quickly
Show that you are a serious buyer by responding to any counteroffer quickly. Letting time go by before telling your agent your response to a counteroffer can leave the door wide open for another buyer to swoop in with an offer of her own. When there are multiple buyers, the seller or the buyers may up the price and you can find yourself in a bidding war. Or, another buyer may offer a a cash deal or a more flexible closing date, making that offer more attractive to the seller.
Tip #4 – Get the Inside Scoop
See what you can find out about the seller. For example, if there is a pending divorce or a transfer to a job out of state in the works, the seller may be willing to accept a lower price for a quick deal. Also, if the sellers have been in the house for a while and enjoy substantial price appreciation, they may more willing to negotiate than if they are recent buyers taking a hit on the price of the home. Your agent can also try to find out about pending sales that have not closed yet to give you a better idea of the market.
Tip #5 – Know what is Included
When you make an offer on a home, it is important to know what comes with the house, and what does not. Your agent can inform you about what must remain with the home, and which items are negotiable. Find out if the sellers are planning to leave those professional kitchen appliances and the gorgeous dining room chandelier. If they are, have those items added to the contract and take pictures so there are no misunderstandings at closing. If you find out that the sellers are taking the lawn mower with them, decide if this is a dealbreaker, or if you can live with that decision.
Tip #6 – Do the Math
Before you make your initial offer, make sure you have your mortgage broker figure out your monthly payments including property taxes and insurance. If you are considering upping your offer during the negotiating process, find out if the new figure is within your budget. It is possible that an additional $5,000 or $10,000 tacked onto the price works out to a fairly small amount in terms of a monthly payment.