When it comes to buying a home, your negotiation smarts can go a long way toward protecting your best interests and your cash. Here are 10 critical negotiation tips to help ensure you are getting the best deal possible:
Crunch the Numbers
Get your finances in order before you start. Your offer is much less persuasive if it doesn’t include a preapproval letter from mortgage lender. You will arm yourself with the knowledge of just how much house you can and are willing to afford. Getting pre-approved can help you feel comfortable with the price range you are shopping and negotiate for the best price.
Set Your Standards Early
Knowing what’s really important early on is critical to getting a great deal. Ultimately, the bar for whether your negotiation is successful is determined by that the home and contract terms are worth to you.
Know Your Area
The most informed are the best negotiators. To get the best deal when buying, ask your agents to provide data on these critical local factors: Recent sold prices for similar or comparable homes.
Average days on the market for similar properties
Average difference between asking and sold prices
TIP: Decide on your high and low prices and what your biggest priorities are before the negotiation begins.
Your Agent is the Expert, Protect Your Leverage
Don’t make contact with the seller. Make sure you contact your agent to help you with all questions. Studies show that communication between a buyer and seller results in a more complicated closing process and fewer contacts that close. A good agent, with knowledge of the market and negotiating experience can make a difference between a successful purchase and a deal that falls apart.
Gauge the Situation
Remember, when negotiating, the least emotional parties usually have the most power. The more attached you are to a particular home, price point, or set of terms, the more likely you are to panic or cave in on important points, like price unnecessarily. Enter negotiations prepared to compromise. Lean on your agent for objective support throughout the transaction. It’s their job to help ensure you are making the best business and life decision.
Focus Only On the Negotiable’s
Find out early what is and isn’t within each party’s control. You’re certainly hoping to get the best price and terms when you buy a house. To do that, you need to know when to start negotiating and when to stop. Your agent can help you stay clear on this and avoid the emotional exhaustion that results from trying to haggle in areas that aren’t really negotiable (e.g. the bank’s bottom line, cosmetic repairs, etc.)
Put Time On Your Side
When buying and selling a home, moving deadlines can cause you thousands of dollars and cause you to make needless compromises because you are in a rush. When buying or selling, here are a few ways to buy yourself some time: Plan and search when possible.
Locate temporary rentals
Develop a plan-B for closing day in case you encounter last minute hurdles
Problem Solving –A Life’s Lesson
Traditionally, negotiations were a two-way power struggle between buyer and seller. Now, the buyers have to consider banks, appraisers, and sometimes even property associations that all have their own guidelines and needs that impact the terms of the deal. It’s more important than ever to approach your negotiation as an exercise in problem solving, with the aim of meeting the needs of as many parties as possible. Communicate With Your Bank
Too often transactions fall through at financing. Work in advance to make sure your deal doesn’t die at closing. For buyers this means working with your agent and mortgage broker to insure that requirements are met and in timely manner. Be Quick , Not Impulsive When you find “your” place, make an offer. When you get a counteroffer or response, respond to it. In real estate, time is always of the essence, and prolonged hesitation often results in lost opportunities. There is nothing wrong with sleeping on a decision overnight, if the right move is unclear. But keep in mind, there are competing buyers and changing interest rates lurking, which can change the whole bargaining process at any minute.
Buying A Home
New data shows that owning a home can be less expensive than renting. Low interest rates and soaring rental rates makes it more affordable to buy a house today than it has been in ages. More reasons to buy a home today…
When you pay rent, you don’t own anything. When you pay a mortgage, you increase your degree of ownership in your home with every payment. Also, you can borrow against your ownership or equity in the home to pay for major purchases, or refinance your home at favorable rates, or once you’ve paid the entire mortgage off, borrow to fund major purchases like a second home or a child’s education.
You can deduct mortgage interest as well as your property taxes. Uncle Sam does not give renters a bonus.
So, you like artwork on the wall? Hammer away, they are your walls now! Go ahead and paint them lime green! 10 Steps to Buying a Home
Step 1: Are you ready? Are your finances in order?
Step 2: Get Loan Pre-approval
Step 3: Get a Realtor
Step 4: Search for Homes
Step 5: Choose a Home
Step 6: Make an Offer
Step 7: Get Inspection and Insurance
Step 8: Get Funding Approval from Mortgage Lender
Step 9: Close the Loan
Step 10: Move In!