You did it! You found the house of your dreams, and you’re ready to make an offer, but where should you start? Here are 6 tips on how to negotiate a lower home price and get you into your dream home.
1. Keep Your Emotions in Check!
Don’t let the seller know how interested you are in the house! I see it all the time…a buyer will walk into an open house and they instantly fall in love. They start telling everyone within earshot (including the agent who’s selling the home!) which bedroom they’ll turn into an office, or where their furniture will go then they make a low ball offer. The problem is, the seller has already seen your cards and can see right through your bluff. Don’t do that! Keep your emotions in check and treat the transaction as a business deal. Take emotion out of the equation and understand that it is not the end of the world if you do not get that home. There will always be another home!
2. Know the Current Real Estate Market
Before you start negotiating you should take some time to fully understand the current real estate market in the area you want to live in. Start out by finding out what other similar homes are selling for in the neighborhood. This is called “Finding Comparables”. Not only will this give you a good idea of where you should start your offer at, but it will also prevent you from overpaying for your home. For instance, if you offer $20,000 more than what other houses are going for in the area, good luck getting a mortgage on the home, because banks don’t want to lend you more money than what the market says it’s worth. Another thing you can do is ask your Realtor (Me) to check on a couple things for you like how long the house has been on the market for or how many times the seller has dropped the price. That information is important because it might give you insight into whether or not the seller might be motivated to sell. If the house has been on the market for a long time and they have done some price drops then either the house has a ghost or the seller is just waiting for you to make a realistic offer!
3. Please be Realistic
Do not. I repeat. Do not make an unrealistic offer. Do the opposite. Be Realistic! It might be a buyer’s market, but seller’s are not just going to sell as soon as they get an offer. A reasonable offer is one that takes into account comparable sold homes within the last 3 months, a look at other homes that are selling in the near vicinity and the condition of the home. Imagine if you were the seller and someone offered you $300,000 for a $400,000 home. How would you feel? You’d probably feel mad and insulted and you would probably refuse to even negotiate with the person making the offer. That’s what you don’t want! You want to bring a realistic offer to the table that will enable a negotiation to start!
4. Find out if the Seller is Motivated to Sell
Try to find the seller’s motivation for selling their home. They will try to keep this information secret, but if you ever find yourself in a situation where you’re in a room with the seller or seller’s agent, go ahead and ask them something like, “So why are the owner’s selling?” Maybe the owner’s are transferring to another state for work or it’s a second home and they just want to unload the property. In any case, this information will give you a good idea of how low you can offer because it gives you insight into the seller’s motivation to sell. If they have to move to another state for work, it is probably in their best interest to sell their property as quickly as possible while they’re still in town, so this gives you an opportunity to offer a little bit lower than normal.
5. Offer Perks that Make your Offer Attractive
There are a lot of things you can do to make your offer stronger especially if you’re offering lower than the asking price. Try these following perks to see if it can sway the deal!
a) Limit your contingencies. Get your loan approval ahead of time and take the financing contingency off your offer. The seller will appreciate that if they accept your offer that you are well qualified and there will be little to no bumps in the road to getting the deal closed.
b) Pay in Cash. This also eases your seller’s mind because they know you’re not dependent on a bank to approve a loan.
c) Offer a quick close. If you have the means and/or your bank can close earlier than a typical 30-45 days, that can mean the difference in whether or not a seller accepts your offer. The quicker the close, the quicker the seller gets their money and that can definitely a motivating factor.
Really, when it all comes down to it, the final sales price of home will always come down to what the buyer is willing to pay and what the seller is willing to sell the home for. It’s all about motivation. Does the seller really need to sell the home quickly or do they have the ability to wait it out to get the price they want on the home? Do you really love the home and are willing to pay close to or even over list price?
6. Use me as Your Realtor!
Take the stress out of buying a home and call me to negotiate on your behalf! Don’t let the buying process confuse you. If you use me as your realtor, I promise to guide you in the buying process and make sure that you are comfortable during the negotiating process. Call me today to get started! (843)714-3855.