Statistics show that clients are often hiring real estate agents for the purpose of negotiating for the price that they want.
Are you looking to buy a home? How do you plan to find one within your budget? How comfortable are you with negotiating?
So many factors go into the price of the home and what it currently appraises at. Striking a deal that you are happy with can save you thousands of dollars overall.
Keep reading to learn about strategies you should know when preparing for home price negotiation talks:
1. Market Research
Is market research a negotiating strategy? Yes, the more knowledge that you have of the current market and local market will be extremely beneficial when it comes to negotiating.
Start with homes along the same road and work your way out from there. Know what homes have sold for recently and any other homes for sale in close proximity. Begin to build an idea of why homes in the area are priced or valued the way they are will be important when determining if the home you are looking at has the value that the price suggests.
If you are unsure when making an offer on a house what is fair, check out this guide.
2. Make a Plan With Your Agent for Home Price Negotiation
If you choose to hire an agent, utilize them and their expertise to get the deal that you want. Your agent works for you and you both share the goal of getting the home. They have likely negotiated hundreds of times and can help guide you on what has worked and what rarely works.
Decide how you are going to approach the offer will be important so that you are on the same page. They also know a lot about the value of homes and will have a good idea of what the home may go for based on others that they have seen or sold in the past.
3. Find Out Who You Will Be Talking To
Who are you negotiating with? Is the home for sale by the owner? Does the seller have a brand new agent representing them?
A for sale by owner situation requires a different approach than two agents working together. Owners are not going to have the experience of a real estate agent when it comes to negotiating. Their motivation behind listing it for themselves could be to keep more of the profit and not have to pay a commission to an agent.
If you have an experienced agent but the seller is working with someone who just got their license, this changes the situation. The new agent could be trying to prove themselves and be more difficult to negotiate with.
Taking into account everyone involved in the decision-making process can help you when building your negotiating strategy.
4. Why This House
Why do you love this house? Are you willing to pay more than the house is worth to get it? Do you have any other options that you are in love with?
Defining why you even want to make an offer on a home is important. Whether it is the land, location, size, features, or any other factor, defining why this house is the one you want to purchase will help drive the rest of the sales process.
If you are between a few homes that you really like, your negotiating process could change. You may figure out that one home isn’t worth paying $20,000 over the asking price, while another home is.
5. Consider How Long It Has Been on the Market
Time on the market greatly affects the sales process and subsequent negotiating that follows. If the seller is desperate to sell, they may be more willing to make a deal than someone who is simply gauging the internet for their property.
If you are too aggressive in your negotiation with someone that is in no hurry to sell, you could risk ruining the deal. Timing your offer and taking into account how long it has been on the market will help you make a more informed decision.
6. Get an Appraisal and Inspection
Appraisals are important because they tell you how much the house is currently worth based on a variety of factors. They are completed by a third-party appraiser that has no stake in the sale.
Inspections are important to reveal any issues that the home may have. The sellers may not be aware of underlying issues but an inspection will make them clear.
Requiring both of these when you make your offer can help save you from overpaying. If you and your agent think that the house will appraise for less than the asking price, this can be a good strategy. The inspection can also save you from spending money on an unsafe home.
7. Be Prepared to Walk Away
Walking away is a powerful tool in negotiating. It doesn’t mean that you have lost, it simply says that the terms presented don’t work for you and you’re not willing to continue the discussion.
Whether the seller refuses to move on the price or you no longer feel comfortable with the purchase, walking away from a large purchase can be the option you needed.
Get Started Today
Now that you have read more about strategies you should know when preparing for home price negotiation talks, you can put these strategies into practice today. Buying a home is likely to be the biggest purchase that you make in your lifetime and getting the price that you want for it can make a huge difference.