Unlike most things you buy in life, the price of a home is negotiable. In fact, it’s expected that you’ll negotiate the price, especially in a competitive market. This is a great way to get a good deal on the property, and many homeowners are open to some wiggle room in pricing.
However, you can’t just call out any number that fits your budget. There are things you need to consider when negotiating a price for a home to buy. Not only do you need to be reasonable and strategic with your home negotiations, but you also need to consider a number of factors. This guide will help you get started.
1. The Listing Price
The first thing to pay attention to is the listing price. This is obviously the most important thing to consider when negotiating a price for a home. Why? Because this is the suggestion for what the seller is hoping to make on the property.
While it’s true the listing price is often negotiable, you need to realize that the seller wants to make a profit. If the owner is selling their home before fully paying off their mortgage, they’ll need to pay the difference on any remaining balance. It’s a good idea to base your home negotiations around the listing price if you want to see good results.
2. Your Schedule
Another important factor to consider is actually your schedule. Many buyers are on a strict schedule. Perhaps they have a new job starting soon or they’re relocating. All of these things put pressure on the home seller.
If you have flexibility in your schedule, this is something you should make clear during negotiations. Flexibility might make homeowners more willing to work with you on your offer, especially if it means they can better fit their moving date to their own schedule.
3. Closing Costs
You don’t have to negotiate the price of the home alone. It’s also common to include the closing costs within your negotiations, so this is another important factor.
Closing costs are the fees that are incurred during the transaction. The average closing costs are usually around 1-2% of the home price. They quickly add up, especially for more expensive properties. You might consider negotiating for the seller to cover a certain percentage (or all) of the closing costs.
4. Other Offers
When negotiating, you’ll likely have other offers on the table to compete with. With the average home on the market for 69 days, it’s no wonder you might not be the only one to place a bid on a property.
Learning as much as you can about the other offers will help you with your own negotiations. You never want to walk into a bid blind. Your broker can help determine whether there are existing offers on the table, and this will help you better understand how to negotiate.
5. Home Inspection
Finally, the last thing to consider when negotiating a price for a home is the house inspection. Taking the time to go through the inspection process slowly can work in your favor. This will help you determine just how much negotiation you can get away with.
For example, if a home comes back with a perfect record after an examination, there isn’t much room to negotiate. However, if extensive repairs are needed, you’re now in a much better position to land a deal on the property.
Are You Ready for Home Negotiations?
When it comes to getting a good deal on a property, it pays to be prepared. Knowing how to negotiate the price of a home down to the best deal takes time. It also relies on knowing the right factors to consider.
After reading this guide, you’re ready to begin the negotiation process for the home of your dreams. As long as you’re realistic, you stand a strong chance of snagging that property.