5 Ways to Negotiate the Best Deal When Purchasing a Home
Buying a new home can be an exciting experience: it’s fun to look for homes, visit them, imagine yourself in them, and finally, to find the right one. Across the country, many areas are still very much buyer’s markets, which means that you have the opportunity to get a good deal. However, you can make a good deal an even better deal if you follow certain steps. Some home owners are desperate to sell, while others feel that they have more time; some sellers are actually in denial about the worth of their home. You can assure yourself the best deal by finding homes that you believe you can best negotiate on. While you can rarely know exactly how desperate a seller is, there are certain signs that you can watch for. Here are five ways to negotiate the best deal on the home you want.
1. Look for homes that have been on the market for a while
For some reason, many buyers avoid homes that have been on the market for a long time (six months, a year, etc.) There is a certain stigma that comes with a home that hasn’t sold yet: buyers wonder if there is something wrong or undesirable about the home, and sometimes buyers will refuse to even look at the house if they think it has gone unsold for too long. You can easily benefit from this fact: ask your realtor to take you to homes that fit your needs, but have been on the market for a while. Usually if this is the case, the owner will be more willing to negotiate a good price with you, and you may find the exact home you are looking for.
Homes go unsold for many reasons, but not all of them are because the home has real problems. If a seller prices the home too high in the beginning, it can turn off potential buyers. Also, if the realtor doesn’t do a good job marketing the home, the buyer can suffer. Your job is to swoop in and get the best possible deal, knowing that the price should reflect the problems that the seller has faced trying to sell the home.
2. Include foreclosures in your search
Sometimes when people know their home is going into foreclosure they will intentionally wreak havoc, leaving thousands of dollars in repairs that many unsuspecting buyers will have to fix later. Thankfully, this isn’t always the case, but you do need to be careful because depending on the purchasing details, some homes are sold “as is.” Foreclosures often sell quickly, and many people who flip homes for a living will look at foreclosures, so you have to act quickly to get a deal on a foreclosed home. However, you can potentially save a lot of money by purchasing a home that someone else could no longer pay for, because often the lender just wants to be done with the house as quickly as possible. One way to increase your chance of getting a good deal is to pay in cash, because cash offers are often seen more favorably than offers that come from a loan.
3. Be willing to work on the home
In theory, a seller won’t care whether you can fix up a home or not, but having the ability to do renovations yourself can save you a lot of money in the long run. If you have renovation experience, or you know someone who can help you for very little money, it’s worth looking at homes that need extensive repairs. Many people shy away from fixer-uppers, or they ask the seller to fix large problems when they make an offer (or when the home inspection indicates the house needs work.) If you can make an offer based on how much you know it will cost to fix the problems yourself, and not expect the seller to fix them for you, you may be able to negotiate a better deal.
While sellers often have to fix problems when they arise in an inspection, if you are willing to purchase a home as is, the seller might be more inclined to work with you. This is especially true if the problems are obvious when you make the offer, because if the seller wanted to fix the problems before, they would have.
4. Do your research
If you’re lucky, your realtor will do a lot of research for you, but it doesn’t hurt to do some of your own research, or to direct your realtor. Know as much as you can about the different neighborhoods you are looking at (pay careful attention to how good the schools are, how close stores are, and how well maintained similar homes are.) Also ask your realtor to do a price comparison for similar properties in the area when you narrow down your search to a few specific properties. If your realtor can give specific examples of similar homes that sold for close to what you are offering, the buyers may be more likely to negotiate. Also, if you do your research and find out that something undesirable is in the immediate future for the neighborhood (like a factory being built), the seller may want to sell quickly.
5. Appreciate the property
This tactic won’t work for everyone, but if you honestly fall in love with a house and you plan to live in it for a long time, you may be able to negotiate a better price. Some sellers really do care about their home, and they want to sell it to someone who will take care of it. For example, a couple that has lived in a home for many years may want another family to live in their home if possible.
Not every seller will be willing to negotiate just because you see their house as your forever home; some will just want to sell to the highest bidder as quickly as possible. However, sometimes realtors talk to each other, and you may get a good idea of what kind of people the sellers are through your realtor. It is illegal for the seller to discriminate based on race, disability, etc., but as the potential buyer, you can include additional information with your offer and the seller may decide to accept a lower offer because you want their past future home to become your future home.
These are just five of the ways you can negotiate a good deal on a house. Once you come to an agreement on your offer, you should also hire a good home inspector. If the inspector finds unexpected issues during the inspection, you may be able to negotiate again. Also, while it’s great to get a good deal, remember that you want to pick a home that is right for you (or right for whatever project you have in mind, if you plan to flip it), so while getting a good deal is great, having the right home is important too.