Selling Price Negotiation Tips for Homebuyers

Buying a home can be a fun and rewarding process. Not only are you making an important investment, you’re also making the biggest purchase of your life. In addition to making sure you’re finding the right neighborhood, are looking for the best mortgage loans and financing, and are responsibly selecting the best home for your financial situation, there are other strategies you must consider. Negotiating with the home seller is an important factor in the buying process – depending on the current market conditions, the condition of the home, your finances and the personal situation of the seller, you could be in a strong position to negotiate a good deal.

Negotiation tips

If you’ve found the house you want and are ready to make an offer, remember to prepare a strategy first. You want to ensure, first and foremost, that you will end up purchasing the home. Second, you want to try to get the home at the best possible price. Here are some tips for making the most of your home-purchase negotiation.

• Listen to your Realtor: You should be working with a Realtor, who is a licensed real estate professional. Your Realtor has access to extensive data, including recent sales prices in the neighborhood, comparable prices of homes similar to the one you want, and even information about the seller. Ask your Realtor what a decent offer should be.

• Know your budget: You must stay in your budget, which means you should be shopping for a home within your price range. Don’t expect that you’re going to get a “bargain” for a home – you could be setting yourself up for failure.

• Remember, it’s a negotiation: You aren’t the boss, neither is the seller. Both parties need to compromise in order to complete the sale. Likely, you will need to go up from your initial offer, just as the seller will likely have to come down from the original asking price.

• Understand the seller’s motivation: Why is the home for sale? If the seller is moving because of a job relocation, or is already living in another home, you will know that he/she is extremely motivated to sell the home. If you can understand why the seller is moving, that will help you better understand the best strategy for negotiating. Perhaps offering a short escrow period will be an incentive; conversely, if the seller is still looking for a home to purchase, it may be a benefit if you offer a longer escrow period – maybe 45 or 60 days.

• Find areas of compromise: If the home has been inspected, don’t lose the sale because of a $1,000 roofing bill. Find areas where you can ask for the seller to bend a little – and be prepared to compromise as well.

• Know your number: What do you think the home is worth? How much are you willing to pay for it? Keep these amounts in your head. Don’t undercut the seller – you could offend the seller and lose out on the opportunity for buying the home. Instead, make an offer in good faith – and be prepared to make a second, or third, offer in order to purchase the home.