If you’ve been looking around for the perfect house, its important to know how to buy the one you’ve set your heart on at a price that won’t bust your budget. Why negotiate the house price? Buying a house is different than buying the average good or service–for one thing, the sale price of a house is negotiable and flexible. This means you should do your own research and work alongside a real estate professional to ensure they do everything in their power to reduce the listed price. Here’s 7 tips to help you negotiate the best offer:
1) Work with a real estate agent
Working with an agent can be beneficial in helping you obtain a lower price than you likely could on your own. These professionals know the market well, so they can help you understand property taxes, interest rates, and more. They will also help negotiate the minutiae of your contract to the best terms possible. Click here to find an NIHFCU Home Advantage agent.
2) Assess housing market conditions
In a “buyer’s” market, there are more homes for sales than buyers and sellers will be more eager to make concessions. Thus, odds are you’ll be able to negotiate more forcefully. In a “seller’s” market, there are more buyers than available homes for sale so the seller has more bargaining power. In this situation, you may need to put more earnest money in escrow or start with a higher down payment tp stand out from your competition.
3) Be ready to haggle
If you’re in a buyer’s market, you can start with a lower initial offer price than the seller listed. But even if you’re in a seller’s market, you should still be ready to haggle to get to the best price. Always be ready with a counteroffer until you’re sure the seller won’t budge anymore. Keep your negotiation going until you sign on the dotted line and pay the closing costs on your new home—for that matter, try to negotiate those down, too.
4) Consider contingencies
Keep in mind that unforeseen circumstances can change the whole game of home-buying, and improper preparation for these can leave you disappointed. For instance, if you don’t negotiate an appraisal contingency, you might sign a contract prior to the final appraisal and get stuck paying a higher price than necessary. Make sure to read the fine print of any offers from the seller—you shouldn’t relinquish any contingency rights except in very unusual circumstances.
5) Get your mortgage loan ready
Prior to making an offer on a home, work with your lender (preferably NIHFCU!) to provide proof of your home loan approval. This pre-approval letter will allow you to negotiate more strongly, as it proves you’ll be able to pay a mortgage for the house over which you’re haggling. Click here to get a no-obligation pre-approval from NIHFCU.
6) Inspect the house
Work with the home seller to do a thorough home inspection before making any final offers. This helps you figure out if there are any necessary renovations required or issues with the house that the seller failed to disclose up front. Occasionally, you can insist the seller pay for these changes before they sell you the house, which knocks down your overall costs.
7) Negotiate within reason
While the seller expects you to haggle, avoid making lowball offers so small that they feel you’re wasting their time. Similarly, don’t go in with a higher offer than you can afford. As a general rule, come in about ten percent or so lower than the asking price. Sometimes, you can go lower (in particularly lucrative buyers’ markets), and other times you’ll need to start higher (in especially competitive sellers’ markets).
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From masterclass.com
