Saving money requires a lot more than just spending less and setting up an emergency savings fund. It also involves learning how to ask for what you want. Haggling for a better deal on purchases can not only keep more cash in your pocket but also help you score additional perks you may not have received otherwise. All it takes is making the ask. Here are negotiation tips for three major purchases.
1. Buying a home
Shopping for a home can be overwhelming, especially if you’re a first-time homebuyer. However, it’s important that you don’t let your search overwhelm you to the point where you avoid negotiating the price. But how do you prepare for the negotiation process? First of all, when looking for deals on a new home it will be important for you to do your research. Before making your offer to a homeowner, one of your first steps should be to check how long the home has been on the market. The longer it has been listed, the more power you have when it comes to negotiations. Owners of properties that have been listed for 60 days or longer are more likely to be flexible during price negotiations.
Also see what other buyers paid for similar properties. Take a look at the sales price and compare that with what the buyer ultimately paid. Once you’re armed with that information, you’ll have a good idea of how much wiggle room you have. Websites such as Zillow and Trulia can give you a point of reference for what the average price is for a home in your desired neighborhood.
2. Evaluating a financial aid package
The average cost of tuition for a private four-year college is roughly $32,405 per year, while the average tuition cost for a public four-year college is $23,893 for out-of-state students and $9,410 for in-state students, according to the CollegeBoard. Figuring out how you’re going to finance your college education usually includes applying for some type of school-sponsored financial aid. However, more often than not, the financial aid package leaves much to be desired.
If you received a lot less than you thought you would, you don’t have to just accept the financial aid office’s decision. What you may not realize is you can negotiate your package. This could save you thousands of dollars in educational costs, so you’d do yourself a big favor by asking for more. Start by writing an appeal letter. In your letter, explain any circumstances that will make it difficult for you to pay the tuition. For example, if your partner was the primary breadwinner but suffered a layoff, you should mention that. Also mention if you have any other children you are paying tuition for. In addition, if another school offered more money, make a copy of the award letter and present this as part of your appeal. It may sway the decision makers to add more to the package.
3. Buying a car
In addition to a home and college tuition, a car is another one of the most expensive purchases you’ll make during your lifetime. It pays to make an effort to secure the best deal. Before you try to haggle, make sure your credit is in good shape. The better your credit score, the more negotiation power your have. You can get a free copy of your credit report from each of the three major credit reporting agencies when you visit annualcreditreport.com. Next, do research to see how much the car you’re interested in is worth. Edmunds.com and KBB.com are good places to start. Edmund.com’s True Market Value is another great resource. It tells you what other shoppers paid for cars in your area. In addition, check the websites of the dealerships you plan to visit. This way, you can find out about incentives and rebates ahead of time.
Another tip: Use the power of email. After you’ve gotten price quotes from a few dealers, send an email letting each of them know you’ve chosen a vehicle, you’re ready to make a purchase, and that you’re pre-approved for financing but are willing to finance through the dealer who offers the best price. For more information on this tactic, take a look at auto expert Tom Niejadlik’s step-by-step guide on the Money Under 30 blog.
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