Smart Negotiation Strategies for Home Buyers
Haggling used to be a cornerstone of commerce, but now the art of negotiating price is rarely an option. This can make coming to an agreement on price when buying a home challenging. A home’s list price is almost always a guideline based on current market value. Smart negotiation can often get you a good deal that will save you a lot of money, but you have to know where to begin. Going into a negotiation for a house can be daunting, but following a few simple strategies to can help you make sure you get the best value when buying a home.
Have a Good Real Estate Agent in Your Corner
Knowing how hard to push for a good price can be difficult, especially if you’re a first time home buyer. A seller will be able to tell if you aren’t confident in your offer, and may take advantage of that to command a higher price. That’s why working with an experienced real estate agent is a good idea if you’re new to the home buying process. Not only will a real estate agent have the confidence and experience to negotiate on your behalf, but they will also bring valuable knowledge of market trends and property values to the table. A good real estate agent will also know where you can negotiate costs other than the price of the house. Having the seller contribute more towards closing costs and repairs can help you save money in the end.
Get Your Own Appraisal and Inspection
Don’t trust what the seller or the seller’s agent tells you about a home: they’re doing their very best to make the house seem more appealing – and more valuable – by using smart language and carefully-selected photographs. An independent appraisal of the home will give you an unbiased estimate of its value that might be different to what the seller is telling you. It is a good idea to get your own inspection of the house as well. This helps you to be sure you know about any defects or necessary repairs, and use that information in your negotiations. Damaged or outdated parts of the home lower its value. You may be able to persuade a seller to pay for repairs with an attractive offer for the house itself.
Have Your Financial Ducks in a Row
Presenting yourself as an attractive buyer is the best way for you to persuade a seller to be flexible on sale price and contributing to costs. That doesn’t mean putting on your best clothes for the negotiations. Waiting a long time to close is disadvantageous to the seller, so getting preapproved for a mortgage loan shows that you can finalize the sale quickly. A big down payment also demonstrates your strength as a buyer by showing commitment and the financial responsibility you will need to make your house payment.
Stay Ahead of the Competition
At times, demand for housing can outstrip supply by quite a bit, which means that there are almost certainly competing offers on the home you want. In this case, a low offer won’t get you anywhere. Treat the seller with respect and professionalism, and demonstrate why you’d be a good fit for the home you’re buying by describing your family or your lifestyle in a letter. Older homes often have years of memories attached for their former owners, so make it clear that you’ll treat the home with respect and love. Most importantly, though, don’t get desperate. Keep your cool even if negotiations aren’t going the way you want them to. If you look desperate, a seller will try to leverage that for a better offer. Remember that there are always more homes out there, and that will help you stay calm as you negotiate smartly.
If you have questions about the home buying or mortgage loan process, or feel ready to get pre-approved or apply for a loan, please call 866-236-4779. A Herring Bank mortgage representative would be more than happy to assist you!