Buying a home can be emotional process, but negotiating the price does not have to be. Make a plan and stick to it when it comes to the negotiating process. The Realtor that represents you will guide you and offer you advice, but untimately, you are the one who makes the final decision throughout the process of offers and counter offers.
Here are six tips for negotiating the best price on a home.
1. First and Foremost, Get prequalified for a mortgage!
If your "not" planning on paying cash, get prequalified for a mortgage. This shows the sellers that you’re serious about buying their home and that you can afford to purchase. When there are multiple offers, that will put you in a better position when the seller has to choose between offers.
2. Ask Lots of questions
Are the sellers facing foreclosure or a short sale? Do the sellers have to relocate? Do they have 2 mortgages and trying to avoid paying 2 at the same time? How long has the property been on the market? Has there been any other offers? Why did they fall thru? The more info you have in regard to the seller's situation, the better you can prepare your offer.
3. Work back from a final price to determine your initial offer
You should know ahead of time the most you’re willing to pay, and with your Realtor, work back from that number to determine your initial offer., This can set the tone for the entire negotiation. A low ball bid may offend sellers emotionally and over bidding may lead you to spend more than necessary to close the sale.
Work with your Realtor to evaluate the sellers motivation. Review comparable home sales ,in the area to arrive at your initial offer. Present them to the seller along with your initial bid.
4. Avoid contingencies
Sellers prefer offers with less hurdles the buyer must jump thru. Keep your offer free of difficult contingencies, such as making the purchase conditional on the sale of your current home. Do keep contingencies for mortgage approval, and home inspection. that is a must.
5. Remain unemotional
Put in your mind that buying this home is a business transaction. Watch for signs of interest from the seller, and keep negotiating. While negotiating, every time you agree to a concession, make sure to ask for one in return. For example if the seller counters your offer at a higher price, ask them for a home warranty or help with your closing costs. Remember if the seller won't budge, let them know you are willing to walk, they just might change their mind.
6. Don’t let competition change your plan
There are great homes out there that are competitively priced. They may be dealing with multiple offers. Stick to your plan and don't overbid or give up your terms if you are feeling pressured by the competition. There is nothing worse than paying for a home that is over your budget.
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