The old saying is that in real estate, everything is negotiable. But is it really?
When you go to buy a house, you’re certainly hoping to get the best price and terms. To do that, you need to know when to start negotiating and when to stop. That begins with being familiar with the market, down to the neighborhood and maybe even the street.
If there are more homes for sale than people who want them, there is usually more room for negotiation than if there’s a shortage of inventory, as is the case in many desirable neighborhoods throughout the country.
The pace of home sales has slowed, and buyers are gaining a little more leverage. Plus, many buyers are dealing with sellers who don’t realize that home prices are not rising as fast as last year. That creates opportunities for negotiation on some homes – but not all. Buyers may have some breathing room in certain locations. But in others, lower priced homes are snapped up as soon as they are listed.
With home listings so accessible online, some would-be buyers may think they don’t need a real estate agent. It’s easy to find a house online, but it’s harder than it appears to get from offer to closing. A good agent, with knowledge of the market and negotiation experience, can make the difference between a successful purchase and a deal that falls apart. In most cases, buyers pay nothing to use an agent because real estate commissions are covered by the seller.
Strong financial motive
Your offer is much less persuasive if it doesn’t have serious financial backing. It’s important to ensure you have funds readily available to match the rates for neighbourhoods you are interested in.
Base offer on the home value, not the list price. The recent sales in the neighborhood give you and your agent ammunition and information. If a home is priced at or below market value, you’re unlikely to get it for less. If it is priced above market value and has been on the market for a while, a lower offer accompanied by a market analysis may get you the home. This is where a good agent can be invaluable.
If you see a home you like, be prepared to move fast.
If you take too many chances, you might strike out. There will always be people who want to make a lower offer. When they miss out on the first or the second or the third property, they learn their lessons.
Don’t assume that the inspection will allow you to reopen negotiations. These days, it’s unlikely that a seller will make significant repairs, and you’re better off asking for a credit at closing so you can hire your own contractors. In some hot markets, prospective buyers do an inspection before making the offer so they can submit an offer with fewer contingencies.
Research!Research!Research.
The more you know about the seller, the more you can tailor your offer. Does the seller already have a new place and want a quick closing? Is there a divorce involved? Does the seller not have a new place and therefore would prefer a longer closing or even a rent-back agreement? You have to ask a lot of questions of the listing agent and the seller.The more you know about the seller, the better strategy you can put together.
Expect to compromise.
No matter your price range, you won’t find a perfect house. You’re likely to have to compromise on features and probably even on the big three: price, size or location. Enter your negotiations prepared to compromise, and you’ll be a step ahead.
Don’t get hung up on decor.
There are a lot of things about a house that can be easily changed, including appliances, countertops, carpeting and dated window treatments. Let the little things go.
Remember that terms can be as important as price.
That could mean removing inspection contingencies, making a bigger down payment, accepting the contents with an estate sale or changing the closing date to accommodate the seller. The fewer contingencies you have … the more likely you are to get the house..