Ten negotiating tips homebuyers need to know
Negotiating is an essential skill to have in the real estate business. When you’re buying a property, you’re after the best possible price and terms, and it is through successful negotiating that will help you achieve that goal.
Here are a few tips that can help improve your negotiating skills:
Get pre-approved before searching for a home
Your offer stands a much better chance if it includes mortgage pre-approval. The pre-approval process can sometimes take several months, so it’s best to start early.
Base your offer on home value
Take a look at a neighborhood’s recent sales to gather key information for making an offer. If you see a home priced below market value, there’s a slim chance you’ll get it for much less. But if you see a property priced above market value, you can place an offer with an attached market analysis, you might be able to get it for a lower price.
If you’re looking for property in a very competitive market, it’s best to act fast. Make sure your first offer your best offer. Also remember to avoid taking too many chances by making low offers, as it’s very likely you’ll lose the chance of landing a deal.
Don’t depend on the inspections to reopen negotiations
It’s widely accepted to ask a seller for credit in case an inspection reveals major problems, but it’s highly unlikely you’ll be able to get it in a tight market. Consider doing an inspection before making an offer, so you can prepare an offer with fewer contingencies.
Don’t hesitate to ask
Don’t be afraid to ask for repairs or other concessions, but keep in mind that it’s possible you won’t get them all. It’s also a good idea to wait until the end of the inspection before you make any requests.
Know why the seller is moving
The more information you have about the seller, the better your chances are of making an ideal offer. Knowing why a seller is moving is an excellent way to come up with the perfect strategy for landing a deal.
Prepare to make a compromise
Being prepared to compromise will give you a huge advantage in negotiations. If you’re ready to compromise on several factors such as price, property size, location and features, you’ll have an excellent chance of landing an ideal home.
Don’t sweat the small stuff
Don’t get too hung up on details like décor, countertops, appliances, carpeting, and so on. You can always have them changed later on.
Terms may be as important as the price
Fewer contingencies in your offer will give you a better chance of getting a deal. You can adjust some of your terms like making a bigger down payment, omitting a few inspection contingencies, or setting the closing date that favors the seller to increase your chances of getting the home.
Attach a personal letter alongside your offer
Including a letter with your offer adds a more personalized touch. With this, a seller is more likely to see you as an individual or a family looking to buy a home, rather than just another buyer like the rest.