Buying a home is a big commitment and one that we want to take on with spending the least amount of money possible. So how do you negotiate the best price possible in order to get the home of your dreams?
Here are some tips and ideas. While you may think that you should always negotiate that may not be the truth.
There are times when negotiating can either be a moot point or even detrimental to your obtaining that home that you have your eye set on.
You may want to second think negotiating under the following conditions:
- If it’s a seller’s market in your area and homes are moving fast you can lose the home by trying to negotiate a lower price. In many cases sellers have the upper hand and some buyers are willing to offer even a little above the asking price on a home in order to assure they get the house; especially when there are other bids coming in.
- If the home is new you have little to no room for negotiating. These homes are built at a particular price for a particular profit amount. While they may come down some the chances are pretty low, especially if it’s in an area where homes are first being put up for sale in a newly built trek housing area and are built as high-end homes. You may have a little negotiating room if it’s one of the last few units in the sub-division to sell and the builder’s getting antsy to just finish selling off the rest of the trek.
- If you’re having the home built for you or you are coming in during the building period of the home. The only real negotiating areas you have are going to be upgrades on things like carpeting or flooring, appliances, etc.
- If the price of the home has already been reduced to sell and the price is below the CMA for similar homes in the same area.
- If the home is priced above the CMA for similar homes nearby or basically overpriced in general.
- If the home has been on the market for a substantial length of time, making the seller a little more eager to move the property.
- When the agent has let it be known that the seller’s are eager to sell for various reasons, such as because of a recent job relocation or because they’re carrying two mortgages right now or to settle an estate. While it is not a very good professional idea for the seller’s agent to disclose that information sometimes it happens. Knowing the seller is desperate to sell is never a good move from the selling agent but it does help you to know that you may be able to even underbid the value of the home.
- Don’t offend the sellers by offering a ridiculously low price for their home. If you offend them they may just end all negotiations completely without even making any counter-offer and you could end up losing out on the home completely.
- Back up your offer and negotiations with facts. That means get estimates on repairs needed, show them the CMA for other homes that have sold in the area recently, and any other information that helps back up why you have offered them the amount you have offered.
- When negotiating, if possible, show the sellers that you are pre-approved for a loan so they know that if they spend this time negotiating they’re most likely going to get the deal closed. If you walk in there without being preapproved you have nothing that says “This is what we will pay and we’ve been pretty much assured we can get the money to back it.” Pre-qualified is not the same as being preapproved!
- Get and pay for your own independent home inspection and appraisal if at all possible with the results coming directly to you. You can share this independent inspection/appraisal with the agents and/or seller if you feel it will be helpful to negotiate; otherwise it is your own personal set of information that you can use to determine your final decision on buying the home and whether or not to negotiate.
- Don’t be deterred if your original offer is counter-offered. Depending upon the agent and the seller this is very common and often expected on their end.
In the end you need to weigh how much you want the home and if you truly are willing to pay the price that it’s being offered at. How will you feel if you don’t get this home? If your answer is not too bad, there are other great houses out there then perhaps this home may not even be the one for you.
If you get a feeling in the pit of your stomach thinking if I don’t get this home I’m going to be devastated because there’s nothing out there that’s even come close this, then you may want to negotiate very carefully if at all. Many times a matter of even a few thousand dollars can barely even move your monthly payment price so in the end.
While most of the country is in a buyer’s market there are some areas that are definitely in a seller’s market, especially in vacation type areas or newly developing areas. These sellers’ markets are areas where negotiating can end up causing you to miss out on the home of your dreams, so think it through before you decide to negotiate or not.