Buying Your New Home? How To Negotiate A Better Deal
Whether you’re purchasing your first home or third one, learning the art of negotiation can make a difference in hitting a better deal. Unfortunately, negotiating can be challenging and intimidating, especially if you haven’t done it before.
However, regardless of your home buying experience, there are ways to negotiate effectively. Knowing what to expect and working with a reliable, professional realtor Idaho Falls may help you make the process less scary.
If you don’t know where to start, here are ways to negotiate the best possible deal when buying a new home:
1. Work With Real Estate Agents
Home buying isn’t an easy process. If you’re worried about the outcome of the negotiation process, you can consider working with real estate agents. The best agents can assist you with the entire process, from showing and finding listings that meet your criteria to submitting offers on properties that interest you.
During a negotiation, real estate agents can look for information about the seller, the housing market in your region, and other details related to the house. This way, you’ll have facts to help you make an appealing offer to the seller. So, before you look for any house, hire a real estate professional first.
To find a real estate agent you can trust, consider the following factors:
- Experience: Search for a real estate professional with years of experience in your local area. While you can hire newbies in the industry, more experienced agents will likely have better knowledge about the local market. They may even help you with negotiations to purchase the home you desire.
- Communication Skills: In terms of negotiation, effective communication is essential. Find agents who are good listeners, communicate clearly, and are responsive to your needs.
- Reputation: Reputation is as important as the agent’s experience. Choose real estate professionals with a positive reputation and a history of happy and satisfied clients.
Finding the best real estate agent may take time and effort. Use the above factors during your search to ensure a successful and smooth transaction when buying a new house.
2. Offer Something In Return
Regarding negotiations, the seller isn’t the only one who needs to compromise. As a buyer, you must also be willing to give them something in return. For example, if you want the seller to accept your offer, consider how to persuade them to agree. You can ask real estate professionals to know what terms the sellers are searching for.
If the seller prefers a quick close and you can offer it, try to focus on this during negotiations. If they need a flexible closing date that might change later on, be clear about your schedule. Moreover, when sellers have contingencies that you can meet, tell them. If the sellers see how much you’re willing to accept their terms, they’ll put you at the top of their buyers’ list.
3. Compare The Prices For Similar Properties
Another way to negotiate a better deal when purchasing a new house is to compare the prices of similar properties. For example, if you’re considering a two-bedroom house, search for properties of a similar size that have been sold in your area.
It’s also crucial to consider some aspects such as the property’s age, condition, and structure, relative to other properties sold in your preferred neighborhood. Ask your real estate professionals to assist you in making the comparison process more manageable. Doing so will help save your precious time and effort. Plus, you’ll be equipped with knowledge that you can use to negotiate better.
4. Know The Reason Behind The Sale
Finding out more about the sellers and their reason for putting their property on sale will help you become more effective in negotiations. For instance, if the sellers are moving because they purchase another property, you might get a better offer by asking for discounts. This is especially true if the house needs quick fixes or renovations.
If it’s your first time buying a house and you don’t know where to look for the seller’s information, ask your real estate professional to do the work for you. Determine if the seller prefers a longer or shorter closing process.
If the sellers are getting a divorce or want to move immediately, they’ll be more eager to sell the house. In this case, it’ll give more room for negotiations.
5. Understand The Local Real Estate Market
Understanding the real estate market in your local region will give you ideas on the different negotiation opportunities. Fortunately, with today’s advanced technologies, searching for local market trends is much easier. Some ways to do it may include the following:
- Get Data From Brokerage Firms
You can get more information about local real estate market trends by checking the quarterly reports from brokerage firms in your area. Data from such companies will give you valuable information on what properties are selling, their average listing prices, and how fast they get sold.
- Obtain Insights From Different Information Channels
It’s critical to check the different information channels in your region. These may include local news, community websites, influencers, and social media platforms. Such information outlets can give various perspectives on a particular real estate market.
- Search Online
Use the internet to do a simple search of your state’s market trends. However, while browsing, be specific with your search terms or keywords. Include the place of you wish to get particular results.
The good thing about the internet is that it takes less time to discover useful insights. When the results are generated, read the information carefully to understand everything.
- Study The Local Market Cycles
Understanding the local real estate market cycles is vital as they change constantly. Economic activity and consumer behavior within a particular locality are contributing factors to why the market conditions go up and down.
These factors significantly impact selling prices, vacancy rates, capitalization rates, and more. Once you know more about the market cycles, it’ll be much simpler to negotiate a better deal when buying a property.
- Check The Real Estate Listing Platforms
Each piece of information you need about the local market is out there waiting to be searched. Use real estate listing platforms to learn about your area’s market conditions. Such platforms will provide helpful information you can use as a negotiation tool. However, use reliable platforms only as not all provide quality information.
Learning about the local real estate market can help you make well-informed negotiating decisions. Use the tips mentioned to understand more about the trends in your area.
6. Leave Your Emotions Behind
Purchasing a house can be a major battle between your head and heart. Although you love everything about the house and have started to imagine living in it, you need to be wary of letting your emotions rule during negotiations.
Instead of letting your feelings rule your decisions, focusing on the research you’ve gathered can be more beneficial. Then, be strict when setting limits on the sale conditions and budget. If a house is expensive and the seller doesn’t want to lower the price, you can balance your feelings for the property against the possibility of paying too much. You should also think about how it could affect your budget.
If possible, consider the aspects you value the most when buying a new home before negotiating with the seller. For others, the value can be solely on the market price. But for some buyers, it can depend on the convenience the house offers, mainly if it’s located near the school and your workplace.
Knowing what you value the most in a home is critical to ensure a successful negotiation. If you’re confused about what your needs and wants in a property are, ask your family members or real estate professionals for help to make a wise decision.
7. Be Financially Ready
Being financially prepared can make a huge difference in negotiating a better deal. It may include knowing your budget, and one way to do it is to consider a home loan pre-approval. This will help you determine the price range you can afford.
A pre-approved loan may also show your standing as a buyer when negotiating your preferred terms. It could even help you offer a shorter settlement period.
For lenders, a pre-approval will help them get a sense of your overall financial situation. This way, they’ll know in advance how much they’re willing to lend you, which can be helpful when you need to make an offer on your prospective property.
However, it’s essential to remember that pre-approved financing doesn’t always guarantee that your lender will approve your loan. When you offer your target property, your lender will get a valuation to ensure you’re not paying more than it’s worth. Once they feel you’ve offered too much, they might not give you final approval.
8. Know What You Can Negotiate
Most of you would consider keeping the price down when negotiating a better deal. While it’s an essential factor, it isn’t the only negotiable aspect of the home buying process.
Before you make an offer, there are other opportunities to negotiate aside from the listing price. In some instances, focusing on the price won’t get you far. Depending on the property’s condition and the local real estate market, here are the things you can negotiate successfully:
Some buyers often take home inspections for granted to speed up the transaction. However, it’s risky, and you might not want to deal with unexpected repairs as soon as you move in.
To negotiate a great deal, it’s wise to move forward with a home inspection and use the results to lower the asking price. A professional inspector will assess the property for problems such as foundation cracks, mold and mildew, and other home system issues during a home inspection.
A home inspection uncovers problems that can be deal breakers. You can ask the seller to fix the issues, lower the price, and give you credits for the closing costs. You may even use the results to cancel the negotiation if they reveal major home problems.
Remember that home inspections aren’t the same as appraisals. The appraisers will only give you a rough estimate of how much the home is worth. Appraisers won’t inform you about broken lights or missing shingles.
On the other hand, home inspectors will offer a closer look at the issues you may face with the property once you purchase it. Before you finalize your decision when buying a house, ensure to get an inspection and appraisal. If you have time, attending the home inspection will help you decide and negotiate better.
- Closing Costs
The closing costs are often a major burden for many buyers. Therefore, when negotiating a deal with the seller, ask them for help to cover the closing costs.
Most sellers care about the net proceeds and not only the purchase price. Asking the seller for credits toward the closing costs lessens the cash required to close the transaction. It benefits sellers by increasing the possibility that you proceed with the transaction. You may also offer to offset the seller’s credits toward closing by providing a higher price.
- Home Warranty
Generally, home warranties provide peace of mind to buyers. These cover the cost of replacing or repairing major appliances once they break down in your new house. These may also cover fixes to electrical, heating and cooling, and plumbing systems.
In several cases, it may be handy to negotiate for sellers to cover home warranties as part of the buying process. When sellers pay for the warranty, it could be a win-win for everyone, especially if something has come up in the home inspection results.
These are some of the many things you can negotiate when buying a house. If you think you miss something, ask professionals for assistance to help you negotiate better.
Buying a new home can be a nerve-wracking experience, particularly if great options surround you. But regardless of your needs, budget, and experience in home buying, being prepared will help you boost your confidence and negotiate effectively. To get the best results, remember the above tips and be ready to strike a better deal.