6 Must Know Tips To Negotiating Your Home Purchase
Negotiating the price of your home can be a strenuous process
. How do you know you are getting the best price for your new home. There are many ways to help put you in control of the negotiating process while still creating a win/win situation for yourself and the seller.There are two places to negotiate. One is on the loan itself. The other is on the purchase details of the house you will be buying.
Now a lot of people in the United States are not used to negotiating. We get very used to going to the store and paying the given price tag on the item we are purchasing.
With your home there is a lot more to consider. The deal you negotiate will determine what you may be paying for the next 360 months. You want to be comfortable with the payment you will be making and it is determined by the purchase price you agree on.
Think of it this way. You could be knocking thousands of dollars off the overall payments on your house with each point you negotiate in your favor. So here are some tips that can help you in negotiating the best price for your home.
On your first offer, offer less than the asking price. In most cases houses sell for less than what is being asked for the home. In general you can ask for around 5% off the purchase price. Always ask for more off the price than what you are willing to pay. We find that most negotiations end up pretty close to the middle of the original asking price and the first offer because the first offer "brackets" their price.
You absolutely must look at many houses before making an offer. You need to develop a feel for what houses are selling for. Don't restrict your research to houses on the market... you also want to take a look at homes that have recently sold in the area you want to buy. This will better arm you when you finally find a home you want to make an offer on.
This will also help you to determine when you come across a bargain. These days, there are many bargains to be found. You want to find that seller that needs to sell more than you want to buy. Its best to jump on such a property and get your offer in. Make sure you put in your contract that the property purchase is subject to a home inspection.
If you decide later that this isn't the house for you or the home inspection uncovers some other problems with the house (sometimes what looks like a bargain can end up being a money pit) you can get out of the contract and keep on searching for another property.
This brings up another negotiating point. There are generally two times you have to negotiate. Your second negotiation comes after having a home inspection done.
Home inspections usually turn up unseen problems with the property. If after the home inspection you decide you are ready to move forward you can either move forward with the contract you already agreed upon or you can renegotiate based on any problems or defects that were found during the home inspection.
Always make it a win/win situation. You want to make sure everyone is happy with the transaction. A good negotiator always leaves the other party thinking they won the negotiation.
Always ask for more than you want. Maybe the roof really needs to be replaced and so you decide to ask for that in your offer. If that is the only point that is to be decided then someone has to lose. As soon as there is only one point to negotiate over someone has to concede.
As long as there are multiple items to negotiate over there is still room for each party to win in the negotiation.
Instead you can ask for additional items. You could lower the purchase price $3000 and ask to add the existing appliances to the sale.
The other party has no idea you only want a new roof. You now have two items to concede to the seller so that they feel they got the best of the negotiation. (You asked for three items and only got one.) And you get what you want. This is all part of a win/win negotiation.
There is a saying that "if you don't ask you don't get." You may be surprised and get more than you bargained for in a negotiation. Maybe the seller is really anxious to sell and will accept your offer as is. It is always possible to get a better deal than you would settle on.
Always weigh how much you actually want the house and how long the house has been on the market against what you are willing to offer. There is almost always more activity around a house when it first goes on the market or when it first gets listed.
If you do fall in love with a house and the price looks right you may just want to make your negotiation be offering a full priced offer on the house before someone else beats you to it.
Negotiating is an art that you can always learn more about. If you are interested in finding more about negotiating you can pick up the book Secrets of Power Negotiating by Roger Dawson. Whether you want to become a power negotiator yourself, or if you just want to know some of the tricks that sales professionals may use in their negotiating, this is one eye opening book on negotiating skill.
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