After combing through hundreds of listings, you’ve finally found your dream home. Now that the search is over, you are about to start the most tense, nerve-racking part of the whole home-buying process: negotiating the sale.
Before you decide on a price you’d like to offer, do your homework. There are a lot of things to consider before you just throw out a number and hope for the best.
- Is the home overpriced for the market? If you are unfamiliar with the community in which the home is located, you need to gain an understanding of the sales in that area. See what comparable homes are going for and check out the prices of houses that sold within the last three months.
- Find out why the seller is selling. Need a change of scenery? Looking for a bigger/smaller home? Relocating for a job? If you find out the reason behind the sale, you can gauge the amount of time the seller is willing to spend negotiating and closing. If the seller doesn’t have to move right away, he or she has the luxury of waiting for a better market. However, if a quick sale is needed, serious offers (even if they are lower) may be accepted.
- Don’t simply wait for the price to be reduced. You may lose out to another buyer who put in an offer that you would have been happy to pay. Begin the negotiating process right away and try to reach a mutual agreement.
- Don’t make your final offer your first offer. Start low and give yourself room to move up pricewise. If you start with the absolute highest you are willing to pay and the seller doesn’t budge, you’ll end up paying more than you want, or you may not even get the house at all.
- Use bargaining tools. If you don’t need to take possession of the home right away, offer to rent the home back to the previous owner after closing (at a reduced rate or even free of charge). This could sweeten the deal and allow you to make a lower offer that the seller would be willing to accept, even if he/she wanted a higher price. Another good idea is to bring a lender preapproval letter with you. If you make an offer and sellers see that you are qualified to buy, they will take your lower offer more seriously.
Buying a house requires more than simply finding a property and suggesting a price. It is a long process that takes some research, especially if you want the most bang for your buck.