Buying a House: Your Guide to Negotiating the Best Price
Buying a new home can be stressful, and once you’ve finally found the home you want, you want to make sure that you get it. For many buyers, emotion takes over at this point and you may be tempted to offer the asking price – or even above – to ensure that your house doesn’t go to anyone else. But smart buyers know that negotiating the price of the home can get them the best value.
Understanding Negotiation When Buying a New Home
Most sellers set their asking price with the knowledge that negotiating will be a part of the process. When making your initial offer, it can be a fine line to walk. You want to show interest and enthusiasm for the house without losing your head. An offer that is too low will likely insult the seller and be rejected and offering too much might mean you will overpay. If you’ve done your research, and you’re working with an experienced real estate agent, you will know the fair market value of the home, and you can go from there. Working with your agent to find a good number to start with invites the negotiating process.
Setting Time Limits
One of the quickest ways to lose your negotiating power is to get into a bidding war. Often, bidding wars can take you out of your comfort zone and could potentially get you locked into a home you can no longer afford. Generally speaking, setting a 24-hour limit on your offer gives the seller enough time to consult with their agent and respond before a bidding war can begin.
Get Creative with Negotiation
Perhaps the seller will not be willing to negotiate on price but will be open to other conditions. Many sellers will include appliances, window coverings, backyard playgrounds, or other features that would not be automatically included in the purchase. The seller may also be willing to do certain repairs or even cover certain closing costs. Your agent can guide you on negotiating this part of your offer as well.
The Importance of a Knowledgeable Agent
Working with a knowledgeable, local agent is the key to buying a new home for the right price. Your realtor understands the market in your area and will be able to advise you on how to proceed. For example, in certain markets where buyers are low, there may be a good chance your offer will be the only one received. In this case, your realtor knows that the seller may be willing to negotiate more quickly to secure the sale. Your agent may also be able to find out what is motivating the seller. Have they already purchased a new home? Are they relocating for work? When the seller is motivated to close a deal and move on, they may also be willing to negotiate on the sale price to make it happen. Having a quality agent who knows how to find this information is crucial when it comes to negotiation.
If you can’t agree on the right deal on the first property you made an offer on, don’t worry. Part of negotiating is knowing when to walk away, knowing that the right property for the right price is out there. We’re helping buyers just like you get into the home of their dreams. Contact us today to talk about your home ownership goals. We have the experience and knowledge to get you the best price on a home that fits your needs and budget.