Negotiating the Sale: Tips for Home Buyers

Negotiating price is one of the biggest steps in the home buying process. For many first time home buyers, the negotiation process is a bit of a mystery. Taking the right steps can help you get the right price for your needs.

Understand the Negotiation Process

The negotiation process starts with an offer made by the buyer. The offer will consist of many parts, including the proposed purchase price for the home, details about the down payment and the earnest money deposit.

The contract will also include information like concessions, contingencies and the expiration date. Concessions are costs that you would like the seller to pay, and contingencies are protections written into the contract that will allow you to back out of the offer at various points in the process. The expiration date is the date by which the seller must respond.

Once the offer is written up, it is sent to the seller’s agent. The seller may accept, counter, ignore or reject the offer. If the seller counters, you may counter again until an agreement is reached. If the seller ignores the offer until it expires or rejects the offer outright, the buyer may continue to make offers. Once an offer has been signed by both parties, the escrow period begins and the procedure to buy the home is underway.

Consider the Comps

Nearly every offer on a home sale starts with a consideration of the price of comparable homes in the area. Checking the comps gives you a good basis for a starting offer. Checking the comps will also help you decide whether or not the house you want is fairly priced. The more fairly priced the home, the more competition you may face from other home buyers. Fair prices typically give home buyers less room for negotiation.

Keep Your Offers Within Your Means

At some point you may find yourself in a bidding war, or with a seller wanting you to pay more than you had originally hoped. Don’t forget that each offer you propose could become eventually your final contract, if the seller should accept. Check back with your mortgage lender with each new offer you propose, to ensure that the associated monthly payments would be within your means.

Don’t Get Emotional

Buying a home can be stressful for home buyers and home sellers. Sometimes it’s difficult not to get emotional during the flurry of offers and counter offers. Let your agent be the voice of reason that helps you through the process. Take care to make logical, well-reasoned decisions based on your real estate agent’s suggestions.

Be Ready to Walk Away

Getting too attached to a property puts you in a position of weakness. Being prepared to walk away from the home sale will help you make smart decisions that are right for your needs.

Keep All Communications Through Your Agent

Some buyers find it tempting to reach out to the sellers directly during the negotiations. While this may seem like a reasonable impulse, many buyers are not familiar enough with the buying process to make wise strategic decisions during face-to-face negotiations. Letting your agent communicate with the seller’s agent is the best way to avoid misunderstandings and keep the negotiation process moving.

Work With An Experienced Real Estate Agent

Working with an experienced agent from the beginning to end can help you get the price you want for the home you decide to buy. Real estate agents have tricks and strategies that help buyers negotiate, and many agents are also good at anticipating the moves and motivations of buyers. Having a good agent on your side is the best way to get a good price for your home.

Espana Gomez is an author of this blog. Recently she works as an interior design assistant in her town. She loves daydreaming about beautiful homes and interior decor.