There can be a lot of emotional moments when buying a home. But negotiating a price doesn't have to me emotional. You just need to stick to the plan. Your agent will guide you through this potentially turbulent time. Your agent may over advice, but in the end, you're the one who makes the final decision.
Here are six tips for negotiating the best price on a home.
Get Prequalified for a Mortgage
When you prequalify for a mortgage, it shows seller that you mean business and can afford to buy their home. This also puts you ahead of those buyers who may not be prequalified.
Questions are your best friend. You need to know many things about the home and seller your interested in. What's the seller's motivation for selling? What is their financial position? Are they facing foreclosure or a short sale? Have they already purchased a home or relocated, which may make them eager to accept a lower price to avoid paying two mortgages? Has the home been on the market for a long time, or was it just listed? Have there been other offers? If so, why did they fall through? The more signs that sellers are eager to sell, the lower your offer can reasonably go.
Work Back From a Final Price to Determine Your Initial Offer
You should know in advance what you're willing to pay. Then you can work back from that number to make an initial offer. If you bid too low, you may offend the seller. If you bid too high, you may end up spending more than you need to.
You agent can work with you to compare homes in area that have sold recently to come to a fair initial offer.
Sellers don't like taking chances. Nobody does for that matter. So keep the bid free of complicated contingencies, such as making the purchase conditional on the sale of your current home. Try to keep contingencies for mortgage approval, home inspection, and environmental checks typical in your area, like radon.
Remember that buying a home is a business deal. Treat it that way. Consider any movement by the sellers, however slight, a sign of interest, and keep negotiating.
Each time you make a concession, ask for one in return. If the sellers ask you to boost your price, ask them to contribute to closing costs or pay for a home warranty. If sellers won’t budge, make it clear you’re willing to walk away; they may get nervous and accept your offer.
Don't Let Competition Change Your Plan
Great homes and those competitively priced can draw multiple offers in any market. Don’t let competition propel you to go beyond your predetermined price or agree to concessions — such as waiving an inspection — that aren’t in your best interest.
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