How to Negotiate When Buying a Home
The dream of home ownership is one that plagues many adults. Paying into a rental, month after month, may be cheaper in the short term, but over the long haul you can begin to feel like you’re simply flushing money down the toilet that could be going towards an investment in your future. But buying a home is no easy feat. Somewhere between the home you want and the loan you can get is a house that is right for you (or at least for right now), and it can be very tricky to navigate the shark-infested waters of the housing market. First, there are the previous owners, who no doubt want to get as much value from their home as possible. Then there are real estate agents, who may tell you just about anything in order to get a commission. And of course, you will have to deal with loan agents, who must look out for the best interest of their lending institution (not to mention whatever kind of bonus they’ll be getting). In short, it pays to know what you’re up against and actively pursue finding out everything you can before you enter negotiations.
To begin with, hire a realtor you trust. If you don’t know any realtors, ask your friends who were happy with their negotiations for a referral. It is imperative that you have a good relationship with your realtor since they will be your representative in all negotiations. Next, you’ll want to secure a loan. This is absolutely essential since in will determine how much money you have to play with. From there, it’s important to know your position. Right now, with the housing market still sunk in the recession and many foreclosures on the market, you find yourself in a rare position, that of being the stronger party. In most cases, sellers can wait it out if your offer isn’t good enough, or try to incite a bidding war by placing their house slightly below market value. But since you have the upper hand in a buyer’s market, you enjoy a much better chance of negotiating for the price you want on a property that will potentially be worth quite a bit more.
Finally, you’ll want to hone your haggling skills. We are so used to paying sticker price for material goods that most of us don’t have the first idea about how to haggle. But with a little research, you can enter negotiations with a good plan on how to proceed. You must start with a lowball offer (this is expected). But know what’s fair. If you go too low, you may throw your bid completely out of the running. And keep in mind that in this economy, sellers may be a lot more motivated to get out from under a potential foreclosure than to wait it out, so a fair (albeit low) offer might just get snapped up, whereas a ridiculously low one will only be seen as a waste of their time. And remember, save a little something to give up at the end so the seller can feel like they’ve won. This will go a long way towards ensuring the deal is properly sealed.
Sarah Danielson is a writer for The Pickup Artist where you can find great tips and advice on dating.
