Home Price Negotiation and What to Consider

Home Price Negotiation and What to Consider

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The residential real estate market can present challenges to sellers and buyers alike, with the former wanting to get the best price for her home while the latter wants to receive a good deal. As you might surmise, there is some tension at times between the two parties, what real estate agents seek to alleviate to make a deal happen. As a buyer, you can negotiate the price of a home, perhaps shaving more than the customary 5 percent off the asking price. There are some things to consider as you negotiate, tips that can help you save money on your home purchase.

Motivation

Why is the buyer selling? Oftentimes you can uncover this information with the help of your real estate agent. Seller motivation may be the key here: if the homeowner is desperate to move, perhaps in a bid to relocate to another city in pursuit of a job, then their desire to negotiate may be a strong one.

On the other hand, do not expect much room to negotiate if the seller is downsizing, perhaps is she is moving on to senior living or desiring to rent an apartment. For many owners, the home is their chief asset and the funds they get from the sale of the home will cover their retirement needs.

Reality

Some buyers are under the impression that they can offer a low-ball price and the seller will be glad to accept. Instead, the seller is likely to be insulted and will not think that you are a serious party.

You need to know the local market and that comes by reviewing comparables or comps for the neighborhood. If the home is unfairly priced, then you may have more room to negotiate. If the home is priced right, then your offer needs to be a strong one. Your initial offer should be competitive, within range of what they might accept with room for you to bump your price up.

Offer

What exactly should you offer for a home that is of interest to you? Let’s take a look at one example. You found a home that is listed for $250,000, just about right for the neighborhood. Knowing that you may be able to shave 5 percent off the asking price, you offer $230,000 to get the ball rolling. This amount is about 8 percent below the asking price, not too low of an offer, and a good place to start.

If the owner receives your bid, you may get a counter offer. The seller may then ask $245,000, which already saves you $5,000. You can present a new offer for $235,000, demonstrating that you are a serious negotiator. The buyer may hold firm or counter offer again, perhaps lowering her price to $240,000. At this point you can accept the offer or present your final offer of $237,500, which is exactly 5 percent off of the asking price. The buyer may accept or reject your offer, leaving you with a decision on what to do next.

Extras

Home shoppers should keep in mind that there are some extras that can be negotiated when buying a home. This is especially important to keep in mind if the seller is not showing much willingness to drop her price.

Those extras can include things of value that she may not need, but you will have to pay for if you bought the home. Such items include drapes, certain appliances such as a washing machine and dryer, yard furniture, perhaps even living room furniture. Consider what these items would cost you if bought new and keep the value of them in mind as you negotiate. You may end up paying $245,000 for the home, but come away with more than $5,000 in furnishings.

Resilience

Serious negotiators know what they want and stick to their prices no matter what. If you clearly believe that a home can be had for less, then negotiate for a lower price. Avoid showing enthusiasm for the home and keep your emotions in check. Take note of what repairs need to be done and ask for assistance to have these done.

If you cannot get the price that you want, then be prepared to walk away. There are many other homes for you to consider and better deals to be had. Besides, when you move away from a deal, a homeowner may have a change of mind and accept your offer.

Author Information

Sam Dressler is a UK based property expert. She helps consumers navigate the buying and selling process. Did you know for example that in Scotland home reports are a legal requirement. Get help and information like this from her various work across the web.

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