Once you’ve found a home, it’s time to make an offer. And once you make an offer, it’s often time to negotiate. It’s important to know how to handle home-buying negotiations so that both you and the seller walk away satisfied.
If you make an offer that’s accepted, it becomes a binding contract. But there are times when the seller makes a counter offer and you’ll have to respond. Other times, you’ll learn new things about the home you’re trying to purchase that provides room for you to negotiate the offer that you’ve already made. For example, if an unexpected issue pops up during home inspection.
Here are a few tips on negotiating an offer:
• Know the market — Research what comparable homes in the area have sold for, how many similar homes are on the market, how long the home has been on the market, how much the price has dropped, and if any deals have fallen through.
• Be willing to walk away — Once you make an offer, you should look at the home-buying process as a business transaction. It’s rare, but certain things could happen that could lead to it being in your best interest to walk away. Say, if a seller comes back and asks for more than your maximum price point or if major structural damage is found in the home that wasn’t disclosed. Never go in with the attitude that “you can’t lose this house”.
• If you want to negotiate closing costs, write it in the offer before the offer gets accepted.
• Set a deadline — Give the seller an expiration date for your purchase offer, possibly 24-48 hours, so as to avoid the seller having time to entertain additional offers.
• Be realistic — Even though you want to get a good deal, you should always make a reasonable offer. Making an offer that is too low could result in a seller not being interested in negotiating with you.
• Establish a connection — If you can, either meet the seller or write a letter about why you are interested in their home.
• Don’t reveal too much — You want to tell the seller that you love their home, but it’s important that they know that you are also willing to walk away if the deal is not right.
• Ask for a little extra — Ask for a few things that would be “nice to haves” in the home. There’s always the chance that these small asks can later be used as negotiation tools.
FIELD: I think negotiation is one of the most important things that a real estate agent needs to represent you with. Negotiation is probably one of our most important jobs.
GREG: A lot of times buyers want to start low and give themselves room to negotiate up, but one of the reasons you want to partner with a local real estate agent, someone who knows the market where you want to live, is because they know how to best compete against, you know, the other offers coming around.
STEVE: You’ve got to be willing to walk away from a deal. You’ve got to be willing to have silent time during a negotiation. In a home negotiation that can be several days. That’s tough, that’s tough to do but you need to prepare yourself that that’s part of the process otherwise you can spend a lot of extra money.
RAY: Just keep in mind that every seller is very attached to their property. So when you’re negotiating on a home remember that some of the reactions and some of the responses you may get from a seller may not be really as clear and, and, and businesslike as they should. But just understand the selling process for any seller has some emotional attachment. And be prepared to negotiate a little bit longer and possibly a little bit more aggressively but be patient with the outcome because sooner or later if that seller wants to sell, he will sell.