In our previous two blogs, Palm State Mortgage Company gave you information about handing multiple bids when you attempt to sell a home. In today’s blog article, we welcome you to the opposite topic: How to Negotiate When You Are Buying a Home. Today, we bring you 5 negotiation tips for buying a home:
1. Before You Negotiate: Buyers Be Ready!
Although we have blogged about the topic of pre-approval previously, we have not mentioned it in quite a while. Did you know that sometimes real estate agents won’t even show you a home if you do not have pre-approval? So, show you are sincere in pursuing home ownership, and show you have the financing to back up your sincerity with pre-approval for your loan. Find out more about pre-approval in our previously written article.
2. Negotiate A Better Price Tag!
Is it possible to negotiate a better price on the home you have chosen? On the one hand, you must remember that if the requested price is commensurate with comparable sales in the same area, negotiating sale price might not benefit you. On the other hand, if you do your research and you think the home has been over-priced, then you can attempt to get the seller to lower the price, or make other concessions to tempt your buying power. Just be sure you have the market analysis to back up your claim.
3. Negotiation Leverage
You might discover it is more advantageous to negotiate repairs, rather than attack the price tag. After your inspection, if you discover some issues with your home, you can ask for a credit against the total sales price. That would mean you could have the repairs or issues completed by the contractor of your choice.
Likewise, you might be able to ask for part of the closing cost. If you want to appear both knowledgeable and courteous, then check with your lender, concerning limits they might have on seller assistance. In today’s market, it is unlikely that you will get the seller to make significant repairs. However, even in a tight market, you should still feel free to ask for some concessions. Sometimes, the more you ask for, the better your result is going to be. When you are in escrow, you have the power.
4. Negotiate But Don’t Get Pushy
Do the math before you get competitive? If you are stubborn, you might lose the perfect house just because you had to win. For example, with an interest rate of 4.3 %, the basic difference between 195,000 and 199,000 adds up to about $19.00 per month. Is that really worth delaying or destroying the deal?
5. Buyer, Know Thy Seller
To put together a good strategy, know all you can about the motives of a seller. Find out if they want a quick closing, or if they would prefer a longer closing? Is the seller already planning a move a long distance away? Is the sale part of a divorce or an inheritance? Does the seller already have a new place?
So, how do find out these tid-bits of information? Palm State Mortgage believes that part of the beauty of the age of the Internet is that you and your real estate agent can utilize on-line real estate listings and public records to discern the true nature of the seller.
In the long run, always be prepared to compromise. Palm State reminds you that in real estate, terms are almost as important as the price. Part of your terms might mean adjusting your down payment or changing a closing date for the convenience of the seller. To put it simply, the fewer contingencies you have, the better your chances are to win the house.
