Negotiations are a big part of the home selling process. As the buyers will expect you to negotiate, they will always set a higher asking price, so they don’t have to settle for less than they have to. On the other hand, you don’t want to pay more than you must. This means you need to be well prepared, and to help you, we’ve prepared tips for negotiating property prices.
Proper negotiation requires a lot of patience and organization. Hopefully, by the end of this article, you’ll master home negotiation skills. Now, let us begin!
Before you start negotiating the property price
When it comes to real estate, nowadays, you’ll come across real bidding wars. In the current market, there are many buyers but not enough homes, which makes the buying process that much more difficult.
Make sure to do a thorough research of the local market. The real estate broker you hire should be able to help you with this task.
However, before you start negotiating the property price, there are certain things you should be mindful of. Make sure to:
- Get your finances in order – To not get passed over to the next buyer, you need to show the seller that you can get the mortgage. Therefore, it’s important to get preapproved for a loan before you submit an offer.
- Work with a real estate broker – If you think you should search and buy a home on your own, think twice. Sure, you can look into properties online, but a real estate broker is your ally and can really help with negotiating the price of your new home.
- Know your local market – Hiring a reliable and experienced real estate broker will help you learn more about your local market. It’s important to know if the market favors sellers or buyers to choose the perfect time to submit your offer.
Tips for negotiating property prices
Now that you made the first steps towards buying your new property, it’s time to negotiate the price. Here are tips that will help you get the best possible offer.
#1 Communicate through your brokers
There is a lot of real estate jargon you’re probably unfamiliar with, so you can learn many valuable lessons from your real estate broker. For instance, home inspection and an appraisal are often mixed up, but they are entirely different. By getting appraisal documents instead of inspection ones, you can make a mistake and buy a home at a much higher price than it’s actually worth.
By hiring a reliable real estate broker you will get an ally who can help you negotiate and get the best possible price for a home you like.
To help you avoid making these mistakes, make sure to hire an experienced and reliable real estate broker. Your broker should handle any conversation between the seller and yourself. As you’ll hire them to protect your interest, you can be sure they’ll make the right decisions on your behalf.
#2 Find out why the seller is moving away
Getting more information about the seller will help you turn the negotiation to your advantage. Your real estate broker can help you research any information you need. For example, if the seller is getting a divorce or has already bought a new home, they’ll probably be in a rush to sell the old one. Therefore, you can negotiate a better price for yourself.
Keep in mind that moving to a new household can be challenging and stressful, so you need to prepare for this step. After you’ve agreed on the price and terms of buying your new home, make sure to find reliable movers to help you make the transition as smooth and as easy as possible.
#3 Inspect the home
One of the essential tips for negotiating property prices is to hire a certified home inspector who will thoroughly check the property you’re interested in buying.
A home inspector will evaluate the property for any issues such as problems with the heating, foundation issues, HVAC system, and many more. When you get a report and find that there are issues, you can ask the seller to give you credit for closing costs, fix the problem, or lower the property price.
#4 Find out what the closing costs are
If you thought that the down payment is your only cost when buying a home, you’re mistaken. Closing expenses include much more, and they are costs that go to your lender in exchange for servicing your loan.
Ask your real estate broker to negotiate closing costs with the seller. You’d be surprised how many sellers are willing to help.
Closing costs are usually between 3% – 6% of the entire loan value. They typically include credit check fees, inspection costs, and appraisal fees. In some cases, if the seller is in a rush to sell their home, you can ask them to chip in and help with closing costs. On the other hand, if there are many interested buyers, you might want to hold off on asking about closing costs.
#5 Don’t be afraid to get personal
Keep in mind that selling and buying property is a very emotional process and that there are many things to do before selling a home. Therefore, put yourself in the seller’s shoes, and you’ll realize that every one of them wants their home to go to someone who’ll take care of it as much as they did.
One of the most valuable tips for negotiating property prices is to include a personal letter when submitting your offer. The personal touch will make your offer stand out, and even if you don’t have enough money, it can influence the seller and make them willing to help you out.
#6 Start low
As advised, most sellers increase the asking price as they are aware of the negotiation process. The best thing you can do is start with an offer that is lower than the asking price.
However, you first need to research and figure out how much you can push with your opening offer. Make sure to consult your real estate broker, as they will give you the most helpful advice for any situation you might find yourself in.
#7 Don’t hesitate to walk away
If you encounter a seller that in no case wants to budge on the home’s price, don’t be afraid to walk away. After all, they probably have many offers and are in the position to set standards. You might feel tempted to enter this bidding war and even go over your budget, but we highly recommend not to go that far.
The best thing to do is to adopt a disinterested attitude and walk away if things aren’t going the way you want. Also, make sure not to get too attached, as that might cause you to go over your budget and generate more debt than you can handle.
Negotiating can be pretty overwhelming and intimidating, especially if this is your first time buying. Therefore, make sure to hire the right professionals to help you as they will make the process much easier and less stressful.
We hope you found our tips for negotiating property prices useful, and we wish you the best of luck with buying your new home!