Buying a home can be an exciting milestone to reach in life. But if you’re also a bit intimidated–especially at the idea of negotiating with the seller–you’re not alone! This is a very common feeling. After all, most home buyers aren’t exactly experts at negotiation tactics. And that’s okay, because you’ll have some help when you match with an experienced real estate agent who can walk you through the home buying process from start to finish. Plus, you have access to our home buying tips to increase your confidence as you look for a home. So before you submit your offer, take a look at these ideas on improving your chances of it being accepted.
Before you even start looking at houses, you should find out how much you can afford by getting pre-approved by your bank. Before you get pre-approved, your lender will verify your income, debt, and credit before giving you an estimate of how much your mortgage loan will be for.
Pre-approval not only narrows down your home search to houses that fit within your budget, but also increases the strength of your offer. After all, when you include your pre-approval letter with your offer, the seller knows you can afford to buy the house if he or she accepts it.
Another critical factor in buying the home you really want is having the help of a fantastic real estate agent. This is especially the case if you’re worried about the negotiation process and want the best chance of your offer being accepted.
A good agent will help with the whole home buying process, from finding and showing you listings that meet your criteria to submitting offers on houses that interest you. And during negotiations, your agent can find out information on the home, seller, and local housing market so you have all the facts before submitting any offers. That’s why it’s ideal for you to choose the best real estate agent for you before you start your home search.
Now that you’re armed with a pre-approval letter and a great real estate agent, it’s time to put your best foot forward with accurate facts on the market. Knowing whether it’s a buyer’s market or a seller’s market will help determine how much room for negotiation there is.
For example, if it’s a buyer’s market, you should have better success negotiating than in a seller’s market. Your agent can give you this information, and he or she can also let you know how the house compares to other homes for sale when it comes to price and time on the market. This can help you decide what kind of offer to submit.
Another detail your real estate agent can offer you is the reason the seller wants to move. If the seller needs to start a new job in another state or is hoping to complete the sale before the next school year begins, he or she is likely looking for a quick sale. This means the seller may be willing to accept a lower offer if it means finally closing.
On the other hand, if the seller just wants to upgrade and is still looking for another home to buy, they might not be motivated to move fast. This suggests there may be less room for negotiation, as this kind of seller could be willing to wait for the highest offer. Either way, this information is good to know!
Negotiating when buying a home often means both sides may be expected to compromise. If you’re asking the seller to accept a lower price, think about how you can persuade him or her to agree. You can do this by asking your real estate agent to find out what terms the seller is looking for.
For instance, if the seller wants a quick close and you can offer that, highlight this during negotiations. If he or she needs a flexible closing date that could change at the last minute, make it clear that your schedule is adaptable. And if the seller has any contingencies that you’re able to meet, let them know. Your ability to accept the terms the seller may put you at the top of the list of buyers.
Many home buyers assume negotiating is all about getting the lowest purchase price. But you can and should include other factors when buying a home. One detail you can negotiate is closing costs, as buyers are expected to cover these and don’t always factor them in to the total cost of buying a home.
And considering that closing costs are about 2% to 5% of the mortgage total—as they include fees that pay for the inspection, appraisal, and more—many home buyers pay at least $5,000 at closing. So instead of simply trying to lower the cost of the home, think about asking the seller to pay closing costs. Of course, you should typically only ask for this concession when you have some leverage, such as if you can offer the seller the quick close you know he or she wants.
If you need more leverage to improve your chances of your offer being accepted, make sure you schedule an inspection of the house. Once you get the inspector’s report, you’ll know if there are any issues with the foundation, roof, heating and cooling systems, etc. If there are, be sure to point out the problems and let the seller know what you’d like them to do.
If you happen to be handy around the house and want to fix the issues yourself, this can be a bargaining chip for you, as you can tell the seller you’ll buy the home as-is for a slightly lower price. If you want a move-in ready home, it may be better to just ask the seller to fix the issues before you pay asking price.
Most sellers are looking to get as much money as they can out of their home, with as smooth and fast a closing process as possible. But that doesn’t mean they make their decision based solely on these factors. Sometimes emotions play into it. In fact, if they have several similar offers to choose from, how much they like you as a buyer can tip the scales.
If you can meet the seller, making a good impression may help. But it isn’t always possible to meet the sellers, so the next best option is to tell them about your family and your plans for the home via a heartfelt letter. Try to point out anything you have in common so you stand out as likeable to the seller. If your kids are about the same age or you have the same dog breed, subtly include those details in your letter so the seller subconsciously favors you over other buyers.
Sometimes, no matter what you try, your offer won’t be accepted. Maybe the seller is only accepting full price offers and has lots of them to choose from. Or maybe someone else’s emotional letter stuck out to them more. Regardless, it happens to nearly every home buyer, often more than once!
So be prepared to move on from the home you had your eye on. Otherwise, you may be tempted to go way above your budget or offer full price on a house that needs some serious work before you should buy it. The best way to move on easily is to have a list of a few houses instead of just focusing on one. This allows you to quickly pivot into negotiations with the next house on the list as soon as an offer gets declined.
If you’re ready to get started on the process of buying a home, keep these tips on negotiation in mind to start. Then begin your search for a great real estate agent who will take the time and effort to get you the information you’ll need to negotiate–from details on the local housing market to the seller’s reason for moving. If you don’t have a real estate agent in mind already, let LemonBrew connect you with an agent who will make the home buying negotiations go as smoothly as possible. We can also help you get the home loan you need if your offer is accepted, so contact us today to get started on buying your dream home!