Negotiating a home purchase isn’t like an episode of Law & Order. You don’t have to play good cop, bad cop to get what you want. Instead, you should focus on strategies that base themselves with the facts. Oftentimes, these are more effective because the other side can empathize with your point. Of course, it still takes a good real estate agent who knows how to employ the strategy, but for your knowledge, let’s go over some main ideas, so you can better serve yourself during this time:
Setting Strategy: Beginner Points
Even though your real estate agent will be handling most of the negotiating, it doesn’t mean you don’t have a part. To start off, you need to set the strategy with your agent. The local market’s condition is probably the most important factor in any negotiation strategy, so it’s crucial to know what kind of market you are in: a buyer’s market, a seller’s market, or a balanced market. From there, you can discuss which tactics you want to employ with your agent.
Negotiating in a Buyer’s Market
A buyer’s market sounds just as it is: A time where buyers can find great deals in real estate. It’s a time where you have the most leverage in buying a house. Because there are more sellers than buyers, it creates a market that takes longer to sell a property. As a result, homeowners are more eager to hold onto a buyer’s attention when they get an interested party (i.e. compromise and make deals).
Strategy Suggestions: Ask for the Moon
- Negotiate the price tag. For most cases, start your offer at least 10% under the price you want to end up paying.
- Ask the seller to pay closing costs and arrange a closing time convenient to you.
- Do you like the appliances and home theater system in the home? Ask for them.
Negotiating in a Seller’s Market
If you’re a shark in bloodied water when it comes to negotiating, be careful. During a seller’s market, you don’t have as much power as in a buyer’s market. Homeowners with a desirable property will have plenty of offers coming in from different buyers. If yours isn’t to their liking, they’ll turn to the next interested party. What you should do in this instance is make a good, strong offer from the onset (most times on the same day you tour the house).
Strategy Suggestions: Simple is Best
- Be pre-approved for a mortgage loan. It shows the seller you can afford the house.
- Offer the asking price or close to it.
- Don’t ask for lots of extra incentives. Stay focused on the house.
Negotiating in a Balanced Market
A balanced real estate market means there’s equal supply of buyers and homes for sale. Neither side will feel like a pressure cooker, so a lot of the urgency and incentives are mellowed. What you can expect is the back-and-forth of a traditional negotiation. You’ll have to work and pry your way to what you want, but the result should be something better than the original deal. Do expect to compromise though.
Strategy Suggestions: Go Even-Steven
- Offer less than the asking price.
- Aim for terms that are beneficial to you, but expect a compromise.
- Try asking for any personal property you’d like.
Concluding Strategy: Trust Your Agent
If there’s any piece of advice I’d like you to leave with, it would be: Trust your agent. The Remax Alliance Team is a group of agents who have tons of knowledge on the Northern Colorado market, and we’ve seen just about every type of home to go on sale. We know how to work with other real estate agents and there isn’t any other team that’s provided better results. By using your agent’s knowledge and expertise, you can rest assured you’ll get the home you want.