12 Steps to Negotiating the Best Price on a House
The perfect home awaits you. Make the sale happen with as little stress as possible by taking these steps to negotiate the best possible deal on your new home purchase.
Buying a new home can be a stressful process.
Knowing how to negotiate the purchase of a home is the first step when dealing with anxious homeowners and aggressive mortgage bankers if you hope to get the home you want at the best possible price.
Taking these steps can help you negotiate the price of your next home purchase with minimal stress.
1. Bid quickly on selected properties.
The longer a home stays on the market, the more anxious the seller will be.
Some very motivated sellers have priced their homes attractively. Potential buyers should act quickly, as there have been bidding wars even in a buyer’s market for homes.
When good deals come on the market, homebuyers are bidding on the property quickly to maximize the chance of getting a contract.
2. Show enthusiasm for the home.
Sometimes a home seller will want to make sure that the place they have lived in for many years is bought by someone who will take care of it. Selling a family home can be an emotional experience. The buyer who lets the homeowner know how much they love the property and are excited about living there may get the best assistance in making a deal.
Keeping negotiations pleasant and reasonable can make the difference in getting the best terms, like closing assistance or other deals.
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3. Research prices of homes sold in the area.
Before even thinking about submitting an offer on a home, do the homework of finding out what has been sold in the area at what price. Check comparable styles of home, sales in the neighborhood, square footage, and any other variable that will help determine if the asking price is a fair value or above or below the market.
This critical step can save time and money from bidding too high on a property.
4. Gain a clear understanding of what motivates the seller.
Sometimes the seller is anxious to sell a home, and sometimes the seller may want to sell but is not pressed to do so. This can make a big difference in negotiations.
If the seller is in no rush to sell the home, they can walk away from offers that are too low and refuse to negotiate.
5. Start with a lower price than listed.
It is better to start with a lower offer and let the seller counter-offer. That will provide information on how much the seller is willing to back off the stated price and begin real negotiations.
Sellers may be expecting a lower than asking price offer, but make it realistic, or it could be considered insulting.
6. Research how quickly homes are selling in that neighborhood.
If a neighborhood is experiencing strong sales, offering an initial low price may eliminate the buyer from the market. The seller may not acknowledge the offer other than rejecting it.
Know the competition. It is not always wise to just bid low because that is what everyone says to do. Know how strong sales are in the area and the length of time homes are generally on the market.
7. Be realistic about repairs and upgrades.
Many deals have been broken from aggressive home inspection reports detailing every minor flaw in the home.
Home sellers will probably fix broken things, but if minor things like light fixtures or old curtains are not to the buyer’s liking, the seller may refuse to change them. The seller who is not in a dire situation can refuse to make repairs and leave the deal.
Be realistic about what should be expected to be repaired and what can be left on the table. Pick battles carefully.
8. Depend on the realtor for communication with the seller.
People hire realtors to represent them in the purchase of a home. Any communications should be between seller realtor and buyer realtor.
The homebuyer should only communicate issues or ask questions through their realtor and never contact the home seller personally. This keeps negotiations on a purely professional level.
9. Interview several realtors.
Because the realtor will be representing the buyer, it is good to make sure that the chosen realtor is well respected in the community and is a true professional. It is important to remember that the seller’s realtor will be advising them on what is reasonable or acceptable.
Interview three or four realtors before selecting one.
10. Divulge financial information prudently.
The seller does not need to know everything about the buyer’s financial picture.
If the seller can purchase the home for cash or put down a significant portion of the price of the house, they should keep that information to themselves and let the sellers believe the deal will be pending mortgage approval.
It is better to use the information as a bargaining tool towards the end of the negotiations and ask for a price reduction for cash.
11. Remain calm during the process.
Negotiations can be nerve-wracking. It is essential to remain calm during the proceedings and not show fear. The realtors can handle the back-and-forth.
Remember that they also want the sale to go through since they get paid from the commission on the sale.
12. Be willing to walk away from the deal.
Sellers should be able to walk away from the table at any time.
Emotional ties to a property can result in bad deals being made by the seller who just has to live in the house. Sometimes the deal is not worth the hassle of constant back and forth, so it is better to walk away rather than continue unrealistic negotiations.
The perfect home is waiting for the perfect buyer. Knowing how to make the sale happen with as little stress as possible is an integral part of the home-buying process.
Reviewed April 2023
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