Buying a home is one of the most important purchases you will make in your life. In order to make the right decision the first time you need to be prepared by doing your homework early. Consider the following before starting negotiations:
Be Prepared
Research the housing market in the area you want to buy. Once you have information about the general area, focus on the particular property and seller. Look for answers to questions such as:
- Why is the homeowner selling? Ask the seller directly or ask your agent to find out. Are they selling because of employment? Did they out grow the house? Or is there something wrong with the area?
- How long has the home been on the market? Anything past six months on the market should be questioned. Anything past one year must be questioned! Was it over priced? Has there been a lot of differed maintenance? Is there a large number of homes for sale in the area?
- How much did the seller pay for the home compared to the current asking price? Your agent should be able to find out the answer. Find out how much money the seller is going to make or lose on the deal. Maybe you can convince the seller to act as the lender and hold the note (the promissory note that you will sign) for a lower interest rate than you can get at the bank.
- What is the seller’s time frame for selling and moving? Does it fit within your schedule? Do you have a schedule? Use the sellers schedule to bargain with.
- Are there any defects in the home or problems with the surrounding neighborhood? Make sure you have your property inspection completed in the time frame that is stated in your purchase and sale contract. You can ask the seller to make the necessary repairs or even try to get a discount on the purchase price.
As the potential buyer, you want the advantage. While you want answers to all your questions to the seller, reveal very little about your circumstances. Do not give the seller personal information such as your income, the maximum you are able to pay for a down payment or the home, or when you want to move. Make sure that your agent knows not to reveal any such information to the seller or his/her agent.
Also, do not let the seller see how much you want the property. If you appear desperate or overly enthusiastic, the seller then has the stronger bargaining position. When meeting with the seller or listing agent, keep your emotions in check.
Establish a Timeline
Find out if the seller needs to have the sale closed sooner rather than later. If the seller is feeling pressured to sell, use that to your advantage in negotiating. Even if you, the buyer, are the one with the deadline for purchasing a home, don’t let yourself be rushed into making concessions or a purchase you may regret later.
Walk Away
Always remember that you are looking for the right home for the right price. If you are not able to negotiate with the seller, then always remember you can walk away and continue looking. There are a lot of properties available, with the right agent you will find it.
