for the best price possible. A home purchase is likely the largest single purchase of your life, so why not get the best deal possible? These critical negotiating tips can help you find the home of your dreams at a price you can afford.
#1 Be Quick to Respond
You may be inclined to take your time and mull over any counteroffers before accepting or countering yourself. However, it is critical that you respond to counter offers as quickly as possible. Delaying your response can leave the door wide open for other buyers to make a more reasonable offer or create a bidding war. A bidding war is every homebuyer’s worst case scenario, as the sale price can increase exponentially. To avoid this, respond to counteroffers quickly in order to lock in the home at the best possible price.
#2 Always Communicate Through a Realtor
The negotiating process involves communicating with the seller in regards to price, terms, and other factors that can affect the sale. You may be tempted to reach out to the seller to ask them questions or communicate any concerns, however, this is never recommended. This is the job of your real estate agent. They have expertise in negotiating real estate transactions and know how each small change in price or terms can affect the overall purchasing price.
#3 Ask the Seller to Pay Closing Costs
If a seller is not budging much on their asking price, a savvy move that can appease both parties is to agree to the price they desire if they acquiesce by paying the closing costs. Every home purchase involves closing costs that pay for the deed or title transfer, and they can often be quite pricey depending on the purchase price of the home and where it is located. Typically around two to three percent of the purchase price, closing costs can add up quickly. Having the seller cover these costs can allow you to put more money towards a down payment or make any renovations that you may have in mind.
#4 Know the Pending Sales
Sometimes similar comparable sales, known as comps, can be difficult to find. Either the comps are not a similar style or size of home, or they are not recent enough to produce an accurate appraisal value. However, pending comps may be taking place, and knowing the price of these can be a huge negotiating asset. Ask your real estate agent to look into pending comps and try to find out as much information about them as possible. This information can give you valuable insight into the best reasonable price to expect, how far the seller might be willing to detract from their asking price, and the level of competition.
#5 Ask to See the Comps Yourself
Obviously, the more money that you offer, the more likely the seller will be to accept your offer. Since your real estate agent only receives their commission upon the acceptance of an offer, some agents may be inclined to show you the highest comps available in order to expedite the process and close the deal. To avoid this and ensure you get the best deal possible, ask your real estate agent to provide you with a copy of the Comparative Market Analysis, commonly called the CMA. Also ask him or her for the complete MLS listing details of the most similar comps. This way, you can see how similar they are for yourself.
#6 Put Your Real Estate Agent to Work
If there is competition that you must deal with, market research and the presentation of your offer can make or break the deal. Therefore, it is necessary to interview several agents and find one that will put in the effort needed to get you in the home you want at the price you want.
#7 Know the Numbers
If a home is competitively priced, there is likely to be competition that can inch up the sale price. If the sale price of a home goes beyond what you have calculated being able to comfortably afford, it is important to crunch the numbers and determine just how much the price difference will affect the monthly payment. At first, a difference of $10,000 can seem staggering, but this may only result in a slight increase in the monthly payment. So, knowing the numbers can help you tremendously in the negotiation process.
Purchasing a home can be a very rewarding experience, but you may incur a few grey hairs during the process if you and your agent are unprepared. By following these tips, you’ll be able to make the process much easier while locking in your dream home at a reasonable price.
… Written by Daniel Marks, a copywriter that operates a the real estate section on dubizzle.com. He has contributed to various real estate blogs and news sites, and shares the tricks of the trade with the public is something that gives him great joy.