Buying a house is a big step in your life. It doesn’t matter if it’s your 10th house or your first, it’s still just as big of a commitment.
Therefore, it’s natural to want the best possible deal when you engage in negotiating house prices. However, there’s definitely a right way and a wrong way to go about it.
A botched negotiation can put the kibosh on the whole deal. It would be awful to lose the perfect house for you and your family because of a failed negotiation tactic.
To avoid this and other potential problems, check out what the experts have to say about buyer-seller negotiations.
Think from a Buyer’s Perspective
The first thing to remember is that a homeowner who is selling their house is selling a piece of their life. Their house contains memories and moments you could never put a price tag on.
They most likely have an emotional attachment to the house that may make them stubborn and hard to work with. Additionally, if they’re moving because they’re forced to for one reason or another, it may be even more of a difficult process.
Finally, most sellers are in the same position as you. They want to get the best deal possible. Many sellers learn to think like a buyer, so they know how appealing their house is and what it’s worth.
Know Your Financial Situation
You need to know your financial position. Know what you’re preapproved for and how much you’re willing to offer. Decide ahead of time what you want to afford and remember, it’s never wise to max yourself out.
Once you know how much wiggle room you have, you can determine what you’re willing to accept in terms of negotiating house prices.
Do Your Homework
Next, you need to take a little extra time to do some research about the house you’re looking at. There are a few important factors that go into determining a fair price for the house in question.
- Comparable Sales – Take a look at similar houses in the area and what they’re valued at. More importantly, look at recent house sales in the area to see the current market trends.
- Condition – Get a good idea of what condition the home is in via your initial walkthrough and the specs your realtor provides for you.
- Features – Take note of any incentives and features the house comes along with. Things like over-sized shops and garages, outdoor fire pits, and pools can really increase the value of the property.
- Time on the market – How long has the house been on the market? A long period of time on the market could indicate several things such as underlying problems, an owner’s desperation to sell, etc.
Be Realistic with Your Initial Offer
Once you’ve done your research, you are in a good position to make an offer. It’s important, however, not to try to nickel-and-dime the seller. Coming in with a low-ball offer could cause the seller to not even consider your offer or come back with a counteroffer.
They may not take you seriously or be so offended that they don’t respond. Alternatively, coming in too low may set off negotiating house prices poorly and they may end up asking for more or being less accommodating.
Renegotiate After the Inspection
Once you’ve placed your initial offer and it’s accepted, you will have an inspection done. Based on the results of the inspection, you may be in a better position to negotiate for a lower price.
Consider Other Negotiation Tactics
Even with an inspection report pointing out faults that could save you thousands while negotiating house prices, it may be wiser to take another tactic. For example, if the roof needs to be repaired or replaced, it may be better to allow the sellers to handle it while keeping the price the same. Otherwise, you may get a better deal but it’s one more thing on your plate.
Additionally, you could look at extraneous items such as appliances, TVs, or decor while negotiating. You could meet the price of their counteroffer but request they throw in the washer and dryer.
Don’t Try to Seem Disinterested
One mistake many people make while negotiating house prices is trying to seem nonchalant about it. They don’t want to appear desperate because they don’t want to be taken advantage of. However, coming off as disinterested may push the sellers toward other buyers.
Act quickly because you never know what other offers are on the table.
Don’t Get Emotionally Involved
As human beings in this society, we tend to get offended easily. When we send in what we believe to be a solid offer and it’s refused, it’s easy to take it personally. However, reacting from a place of emotion rather than rationale can be detrimental to negotiating house prices.
Keep your cool and try to look at the negotiation from all angles, not just yours. Having a 360-degree perspective allows you to approach things logically, potentially saving you from walking away from a good deal because of pride.
Know When to Walk
With all of the above being said, you also need to know where your sticking point is and commit to it. There are plenty of houses out there, and no house is worth putting your financial security in jeopardy.
Try not to fall in love with a potential home until you have the contract signed and everything clears. Otherwise, it may be too hard to walk away from, even if it requires extending yourself too far.
Stay Positive When Negotiating House Prices
You may not find the right house for you and your family the first day, week, or month of searching. Stay patient and more importantly, stay positive!
The right house is out there, just give it time for the stars to align. When you do find your perfect home, remember these tips while negotiating house prices, it may just save you thousands of dollars or prevent you from losing “the one!”
For more real estate tips and advice, check out the rest of the articles on our blog. The more you know, the better off you’ll be!