Negotiation Tips for Home Buyers | What You Should Know and What You Should Expect
Whether it’s your first time or your 10th time buying a house, the negotiation with the seller can be tricky. The last thing home buyers would want to hear from a seller is a NO! That’s why you want to grab every opportunity to have an edge over the competition, like choosing an expert buyer’s agent and preparing ahead for the negotiations. But what should you know exactly to be able to prepare for the negotiations? Read my negotiation tips for home buyers below.
Negotiation Tips for Home Buyers :
1. Talk to your agent about what neighborhood you’re going into, who the dominant listing agents are in those neighborhoods, and what their styles are like.
The very first step to know how to approach the negotiations is to know who you’re dealing with from the other side.
What type of neighborhood is it? How do they usually price the homes in that area? Do they usually list properties at lower teaser prices to attract a lot of other offers? Or are they more transparent with the prices? Additionally, do the agents usually send out counters in writing or not?
2. Teeing yourself up from a financing, offer price, and terms standpoint
Some of the things that you also need to prepare as part of the preparations for the negotiations include:
- Getting yourself underwritten ahead of time
- Reading all the disclosures, and
- Checking if you can responsibly remove or shorten some contingencies
This part of the negotiation actually happens between you and your agent. They should be advising you what’s responsible and what’s not responsible and what will give you a better chance towards putting yourself ahead of your competition.
In addition, you can also ask your agent’s help to find out as much as possible about 1) who the listing agent is and what their style is, and also 2) what you can do to make your offer attractive BEFORE you even write it.
3. Know who you’re competing with.
Once you’re already done with the first two negotiation tips for home buyers —you’re already underwritten, you’ve read all the disclosures and now feeling a lot more comfortable with your offer, it’s time to find out who you’re actually competing with!
Have your agent find out who are the other agents who will be writing offers against you. Just getting their names and doing a Google search or asking your agent about their track record will already give you an idea about the types of buyers they represent, the types of offers they write, and how familiar they are with that neighborhood, among others. These information will be able to really help you set your expectations especially when you’re competing against multiple offers.
4. It’s negotiation time! What should you expect?
Negotiations can be one single phone call that lasts a minute but it can also be longer or even be a series of meetings or calls. Regardless, what’s important is for you to know if your agent is asking the right questions and if you’re getting real answers. Hopefully with this, they can predict what’s running on the mind of the seller or their agent and to what direction you’re headed to next.
To really prepare for the negotiations and the possible outcomes, you can also talk to your agent about what to expect. What do they think is going to happen? How are you both going to respond given different scenarios?
For example, what are you going to do if they don’t call you back? What if they do call back but tell you that you are on second or third place? No matter what the outcome may be, just make sure that you have a well thought-out game plan and your agent has your back on it.
A few last words about negotiations
When writing your offer, one very important thing to always remind yourself is to stay grounded to your reality and what’s that home really worth to you. Don’t get caught up in the emotion of it just to win it! If it already goes pass your budget—what you think the house is really worth—learn how to walk away from it too. This will help you avoid paying for an overpriced home, and eventually, from having buyer’s remorse. After all, learning to walk away when things no longer feel like they’re still worth it can also mean that you’re one step closer to finding your real dream home.
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