How to Negotiate with a Seller for an even Better Deal on your First Home
Getting the best deal on your first home purchase is no accident. There are many negotiating tactics that work, and work well. Here are some important tips to save you big dollars.
There are many things first-time home buyers can do to fare better in home-buying negotiations. Knowing your strategy going in, standing your ground, and making “friends” with the sellers, all help add up to a great deal on your first home.
After searching homes for sale, your research has finally paid off — you found that dream home! Now that you are a home buyer, you are entering perhaps the most critical part of home buying — the negotiations.
As a first-time home buyer, this is probably also the most perplexing and stressful time. You know that some people are expert negotiators. And, this may or may not be your forte. You have found the home of your dreams, but don’t want to start a bidding war. You want to be able to get the most for your money, and not have to reach your top offering price. Negotiating does not have to be difficult. It is more of a mindset of knowing what you want, staying true to your guidelines, and working with, not against, the sellers.
Remember, negotiating is an art, not a science. In every negotiation there are at least two sides and two different personalities. Adjust your negotiating techniques accordingly. REALTORS® are expert negotiators, who do this every day. Working with a REALTOR® as your buying agent may well give you the best leg up on receiving the best purchase deal.
Here are some great negotiating guidelines for first-time buyers.
Be Prepared to Walk Away
This is always a top rule in negotiating: you must be prepared to walk away. Going into negotiations you need to know the highest dollar you are willing to offer. If you can’t get the house at your pre-determined highest price, walk away.
There are many homes for sale on the MLS® with new properties getting listed daily on the real estate market — guaranteed. If you are hesitant about your top price when you negotiate, your ambivalence will come through to the sellers. First-time negotiators may end up offering higher than their best offer. Don’t do it! Your new budget will start off already stressed, and it will reduce the enjoyment of your new home.
It is important to know, however, that walking away does not always mean the deal is over.
Start the Negotiations at a Reasonable Price
Even in a buyer’s market, sellers do not want to be insulted. They love their home and want to receive at least a fair price. Many first-time buyers believe the best thing to do is to start off with a low offer; this will leave a lot of room for negotiations. However, a low offer may completely turn off a seller.
They feel insulted by the offer and develop an immediate dislike of the buyer. They may refuse to counteroffer or deal with the buyer at all. Sellers will not want “greedy” or “insulting” buyers to move into their cherished home. You don’t need to come up with you best offer right away; leave some negotiating room, but don’t make an obviously low offer.
Study the Comps
Most motivated sellers will respond favourably to a fair market price offer. While you do have to gauge what the house is worth to you monetarily, you will also need to know what comparable houses have sold for in the neighborhood. You can be sure that the sellers know these statistics well, and are basing their expectations on these comps.
Let the Seller’s Know You Like Their Home
You catch more flies with honey than with vinegar — so they saying goes. The same can be said for home buying. First time buyers may feel the need to play it too cool. They may give the impression that they can take or leave a home. This, however, might turn off the seller to the point that they will not want to sell their house to you.
Remember, when you are buying a home, you are buying something that the sellers have probably put their blood, sweat and tears into. Their home is an extension of themselves and their family. You do much better when you compliment the sellers home and let them know how much you like it; how much you admire their gardens and updates. (They do not need to know that you LOVE, LOVE, LOVE it!) Then proceed firmly with your offer.
The sellers will know that you like their home, but that you are not going to let it cloud your good negotiating sense. They will feel good about selling their home to you. This will help negotiations go smoother, and more in your favor.
Never Get Your Ego Involved
Buying a house is just that, a business transaction. Both parties are vying for a leg up. Do not take negotiations personally. Ego has probably killed more deals than anything else in real estate!
This Is No Time to Play Coy — Be Available
Once negotiations start, and an offer is made, you must be available to meet counteroffers or sign papers. Some first-time negotiators think they should be aloof; not be so available to answer a counter. This is not a good thing to do.
If you are difficult to find during the negotiating process, sellers may think you are going to be difficult to work with through the whole house buying process. It may turn them off to working with you. Plus, home sellers can be working with more than one offer at a time. If you’re not available to accept an offer, someone else may be, and you will miss your opportunity to counter or accept an offer.
One Final Word on Negotiating
Finally, remember that negotiating is all about getting what you want. First-time buyers need not be at a disadvantage when it comes to negotiating on their home purchase. For many, getting what you want may include hiring a real estate agent to help negotiate on your behalf. In many instances, finding the right Realtor will remove the stress of the negotiating from your plate.