EVERYTHING IS NEGOTIABLE

 Introduction to Negotiating
In the United States, we are not used to negotiating a price for our everyday purchases. However, when you are buying a home, not negotiating the sellers' asking price may mean paying more than the home's fair market value.  To avoid feeling that you paid too much, you must learn the art of give and take for a successful purchase price.

For example, you may find your dream house with an asking price of $112,000.  Your real estate agent tells you that comparable homes in the area sold in the last six months for $100,000 to $110,000, so you make an offer of $100,000.  Before formally presenting the offer to the sellers, your real estate attorney or agent prepares a contract, writing in the appropriate contingencies, including the condition that all appliances and light fixtures remain in the home.

Within a few days, you receive a counter offer of $110,000 with the seller's contingency that you submit a pre-approval letter from your lender.  After a few more rounds, the seller finally agrees to come down to $105,000 if you move the closing day from four weeks to six weeks to allow their kids to finish school.

Because you need to close in four weeks, you offer to let the sellers rent the house from you for two weeks after closing.  The sellers accept.  Finally, you have a deal!

Remember, the goal is not to crush the seller by getting everything your way.  It is about getting your dream house at a fair price.  Negotiations always involve a little compromise and give and take.

 Negotiating Tips

• Whoever made the most recent offer is legally bound to that offer until it is either withdrawn by that party or the other party answers.
  
  
• Get it in writing!  That includes all counter offers and contingencies to the purchase offer, initialed by both parties.  Your real estate attorney or agent can make sure all amendments are legal and clear to both sides.
  
  
• EVERYTHING IS NEGOTIABLE: From the price, to the closing date, to the chandelier in the dining room.
  
  
• The bigger the gap between the asking price and the offering price, the more time you should allow to reach a mutually satisfactory price
  
  
• Be aware of how long the home has been on the market.  If it has been a few months, you might have a slight edge when negotiating.
  
  
• Ask your attorney or agent to include a contingency about home inspection.  A home inspection typically is not done until after a purchase offer is made, so often the negotiating phase begins without a thorough picture of the home.  Once you learn the home's physical problems, if any, you can ask the seller to make the repairs or lower the price.  You may also choose to walk away if you think the problems are too extensive, AS LONG AS your attorney or agent has included a contingency!  If the contract says you must buy the home at a particular price "as is" or with narrow limitations, you do not have much bargaining power.
  
  
• If you are not the only buyer bidding on a home, remember that the seller is looking for the best offer in terms of price, terms (who is paying for closing, repairs, etc.), and contingencies.  Too many conditions and the seller may very well go with less-demanding buyer.
  
  
• Pick your battles.  Know ahead of time what is really non-negotiable to you, and be willing to compromise on the lesser issues.
  
  
• Last, but not least, keep emotions out your finances.  If you can only afford to pay $150,000 for a home, do not go far above that number in a panic that you might lose this house.  Be willing to walk away.