Buying a new home in today’s real estate market would seem to be as easy as see, sign, and occupy. You are looking to buy the home of your dreams and the seller wants to sell their property quickly and seamlessly.
From their standpoint, the time, money and effort they invest to market their home will bring a positive gain in the end. From your viewpoint, the carefully considered decision to purchase a specific home will benefit you personally and financially.
With this in mind, an informed buyer needs to have negotiating strategies. Just as much as a seller needs to prepare, so does the buyer, especially when several buyers are interested in the same home.
If you know exactly how much you can spend, how you rate with lenders, and how to negotiate during the entire process, it is safe to say you will save yourself from a frustrating disappointment.
By doing some market research and comparing sales in areas of interest, you will have some key information helpful in price negotiation. It would also be helpful to ask your realtor about the list-to-sales ratio. This figure shows the listing price compared to the selling price which helps you to make a reasonable offer.
Decide how much you can afford to pay to avoid any pitfalls in the buying process. This way, you will only consider homes in your price range, saving time and effort. The general rule of thumb is three times your income or more depending on down payments and other long term debt. Getting a letter of Pre-approval from your lender is one of the best negotiating tools you can have. The seller will know ahead of time you are qualified and ready to buy, giving you a competitive edge.
Understand how contingencies or conditions of the sale can affect negotiating. By avoiding contingencies, the closing of the house will be quicker. Weigh out the option of waiving the inspection unless you have concerns about the physical condition of the house. An offer with fewer contingencies closes quicker and can be more attractive to the seller than higher ones with more conditions.
When you submit your offer, make it your maximum bid or close to it. It may be your only chance, so give your best price. Do not insult the seller or waste time by offering a low price. If you are offering the asking price along with other bids, consider other ways to make the deal appealing to the seller. As mentioned before, you can waive contingencies and request a quick closing. You can also secure your offer with an Earnest Money Deposit.
Sellers are encouraged to cut emotional ties to the home. If you are wanting to buy theirs, ask them about what they enjoyed most about living there and about the neighborhood. Tell them what you personally like about the home and the yard.. In a small way, you show them that you are ready to invest your time and effort in a place they called home. This level of connection makes you more than a stranger or a nameless buyer which may help in negotiating, as well.
Be ready to provide a suggested closing date when you make an offer. Sellers often change the date, but make it quick as faster is better. Also, be flexible, especially when it comes to details. Know what matters to you the most, but don’t let an outdated fixture break the deal. Haggling over small things may draw the process and could hurt the sale.
Mainly, be fair-minded and work out concessions with neither you or the seller feeling disappointed. By remaining objective and using negotiation strategies, buying a dream home can turn into a win/win for you and the seller.
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