Negotiating Home Prices-How to Make the Best Offer
The process of buying a home can be daunting, especially for first-time buyers. Finding the perfect house was hard enough, but now negotiating? After the stress of budgeting and house hunting, the added pressure of securing a good price can quickly become overwhelming. Luckily, we’ve compiled a list of expert tips to help you out:
Find the right broker
Having an effective broker is crucial to getting a good deal. Brokers can clarify aspects of the agreement you may not understand and can speak to the seller in real estate terms you might not be familiar with. Given their importance, it’s a good idea to consider multiple agents and find one who can really help you. When considering a broker, ask about their negotiation approach and tactics. Once you choose somebody, know that you still need to be involved. Sometimes agents would rather see a deal go through than their client get the best deal possible, so ask for the things you need and make sure to steer the process in the right direction.
Get creative with the terms of the deal
If offering a higher price isn’t a possibility, you’re not out of luck yet. Many first-time homebuyers don’t realize there is a lot more to negotiate than just the price. To get the best deal, you have to consider all its aspects. This means paying attention to things like closing costs, deposits, and move in dates—and using them to your benefit. Is the seller looking to get rid of the property quickly? Offer a shorter closing. Do they need more time before moving out? Offer a leaseback so they can rent the home for a few weeks after closing. Paying attention to details like these can have big payoffs and save you money that can later be put towards renovations or repairs. Even offering something like raising your earnest money deposit—the money you pay up front to show you’re serious—can sometimes be enough to sway the seller. The average earnest money deposit is typically 1% to 3% of the home’s sales price, so raising that by 1-2% can help you make a stronger case.
Do your research
One of the worst mistakes you can make is making an uninformed offer. Before you even consider naming a price, look into everything. Figure out what other houses in the neighborhood sold for, whether or not there are already offers on the property, and if there were any issues with the house that came up during the inspection. Use your broker to your advantage. The seller won’t always disclose all this information, but your agent can be immensely helpful in asking the right questions.
Find out why the seller is moving
Understanding the seller’s motivation can go a long way in negotiations. Your broker can use this information to help you tailor your strategy to fit the specific situation. How long has the house been on the market? Has the seller already purchased a new place? For the most part, sellers want to sell and will do whatever they can to shorten the process. This may work to your advantage, as they may be willing to reduce the cost or help you get out of your current lease in order to have a quicker closing.
Don’t be afraid to ask
If you never ask, you’ll never get it. When you are considering a home, don’t forget about the little things. A seller unwilling to reduce the price may be ok with leaving appliances or paying for repairs. Scoring a few smaller items like furniture, air filters, and appliances may not seem significant—but it can reduce the burden you might have otherwise had furnishing the house out of pocket. You may be surprised what items seller is willing to leave because they don’t want to deal with the hassle of moving them.
Show some personality
People love their homes. It’s the place where family gathers and memories are made. This is helpful to keep in mind when you make an offer. Some sellers want to know the house will be enjoyed by the new owners as much as it was by them, so mentioning your dream of raising a family there may make them more sympathetic. You don’t have to tell them your life story or a sad tale about why you are in desperate need of the property—but including a nice note about how much you love the house adds a more personal touch that may sway the seller to accept your offer, even if it's slightly lower.
While you certainly shouldn’t be afraid to ask for what you want, you should also be respectful of the owner. Don’t lowball just for the sake of it. If the property is priced correctly, undervaluing it will only insult the seller and hurt your chances. Do your research, make a smart offer, and don’t be unreasonable with the price.
Have your finances well planned
This is perhaps the most important step in buying a home—making sure you know how to pay for it. Nobody is going to accept your offer when you haven’t yet gotten a mortgage preapproval. Before you even start looking for houses, make sure look into getting a loan.
Ready to start the homebuying process? We can help.
At Nuvision, we understand that the process of buying a house isn’t always easy. That’s why we want to help guide you through the process. For over 80 years, we’ve been helping our members with mortgage programs that are flexible, competitively priced, and tailored to their specific needs. With a Nuvision loan, you can rest assured you’ll be taken care of with personal service and guidance. To learn more about Nuvision home loans, click here.