4 Negotiating Tips for Homebuyers
A home purchase requires a significant financial investment. That’s why it will be important for you to do whatever you can to get the best price. If don’t have much experience with negotiating, now is the time to sharpen your skills. You can shave thousands off the listed price if you know how to ask for a deal. Here are some tips for getting the best deal on a home.
Also, stay tuned for tips on keeping up with mortgage payments, and don’t forget to check out our tips for preparing your finances for a home purchase.
Take time to find out as much as you can about your potential home. You’ll want to get an idea of the current real estate market, the seller’s requirements, and details about the property.
“The local market’s condition is the single-most important factor in negotiation strategy. And just like the weather, the landscape is a crazy quilt of micro-climates. Markets vary from place to place and neighborhood to neighborhood. The first thing you need to know is what kind of market you are in: a buyer’s market; a seller’s market, a balanced market, or a market where red-hot bidding wars ensue,” advised real estate website Zillow.
2. Pay attention to home prices in your desired neighborhood
It will be difficult to come up with the right offer price if you’re not aware of the prices that similar homes have sold for. Part of your research should involve paying close attention to the housing prices in the neighborhood. Owners.com president Steve M. Udelson told The Cheat Sheet this will save you time and frustration once you’re ready to negotiate:
As a buyer, it’s important to take into consideration the seller’s asking price compared to the prices of similar homes in the same neighborhood that have recently sold. Beyond researching comparables, getting a handle on historic pricing trends and future predictions is valuable. Owners.com provides rich data at the hyper-local level to help consumers make confident decisions in the housing market.
3. Hire a real estate professional
Real estate website Zillow says it’s in your best interest to work with a knowledgeable real estate agent. He or she will already know the ins and the outs of your desired neighborhood. You can start your search by asking friends and family for referrals. When it comes time to craft an offer, experts recommend avoiding a dual agency agreement. In this situation, one company can simultaneously represent the buyer and seller. Real estate expert Raul Oliveira says this could put you at a disadvantage when it comes time to negotiate the best price:
Unlike the legal field where one lawyer or law firm is prohibited from representing opposing parties in a transaction, many states, including Massachusetts and New Hampshire, do still allow this practice when it comes to real estate agents and their real estate companies. The conflicts of interest are obvious when a real estate agent has one client negotiating against another client. In such a case, the agent’s ability to provide true fiduciary duty to both parties is limited. A real estate agent cannot simultaneously negotiate the best price for the seller and the lowest price for the buyer.
4. Remember to negotiate other details
When haggling for the best price, don’t forget details such as items you would like to keep (for example, stainless steel appliances) and home repairs. These smaller negotiations could save you money in the long run. Udelson recommends not just focusing on the financial aspects of negotiating:
Once an offer is submitted, depending on how far apart the buyer and the seller are in terms of price, buyers should discuss their willingness to negotiate. Keep in mind that negotiations are not solely financially focused and may consist of working out deposit amounts, settlement dates, repairs to be made by the seller and potentially which appliances will be left behind. Everything is typically spelled out in an agreement of sale, a real estate form that can easily be found online for each state.
More from Money & Career Cheat Sheet:
- How to Prepare Your Finances for a Home Purchase
- Owners.com President Talks Alternatives for Buying and Selling a Home
- Mortgage Closing Costs on the Decline: How to Get a Good Deal
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