We all know that negotiating price is important to the home buying process, however, most buyers forget that it’s not the only thing that needs negotiating. Price is just the first thing that is negotiated – once you open escrow, the real deliberations begin. There are hundreds of things to negotiate in a home sale once you’ve signed the purchase contract such as inspections, repairs, home warranty, and closing costs so it’s important to be prepared.
You Will Want A Buyer’s Agent – Trust Us
With so many things to negotiate in a home sale, it literally pays to have an agent on your side. So what do you need to look for in an agent? John Wenner, a professional negotiator and co-founder of the Real Estate Negotiating Institute says, “One of the biggest things an agent needs to show is their ability to negotiate on your behalf. Buyers need to ask their agent – What negotiating tools do you have available to help me accomplish my goal?”
It takes years of practice, market knowledge, and some learning to be an ace negotiator. That’s why the first thing you should look into before you start making offers on homes and trying to negotiate sales is finding an agent to help you out. Negotiating tools your agent should have to include prior knowledge of your local area, professional training in negotiation strategies and most importantly determination.
As a buyer, you don’t have to pay for your agent out of pocket. Their commission comes out of the home sale so don’t let fees stop you from finding a professional to do some smart negotiating on your behalf.
Sellers are Asking for More Than They Expect to get
If you look at listing prices and sold prices, you will notice that sold prices are always lower. That’s because sellers are already highballing when they put their home on the market, anticipating a negotiation with buyers looking for a deal. Sellers ask for more than they expect to get so it’s ok to make an offer that is below their listed selling price.
Beware: Know the market you’re up against. In a seller’s market with low inventory and bidding wars, you don’t have the luxury of making a lowball offer. In a buyer’s market, however, you can offer as much as 10% below a seller’s price without worry.
Be Ready to get Inside the Seller’s Mind
You have to look at what’s being said by the other side and decipher their goals or self-interest in order to be a good communicator and negotiator says Wenner. Understanding the seller means understanding why they are selling their home in the first place. By understanding their standpoint and motivations, you will learn how to approach your negotiating. Are they looking forward to retirement? Are they in a rush to move out because they’re relocating for work? Knowing the seller’s motivation is the key to engaging them in negotiations and getting what you want.
List of Common Negotiations
There are hundreds of negotiations that are a part of a home sale. Here is a quick list of just a couple major points you and your agent with be negotiating on for your new home:
- Price – Negotiating the initial price of the home is just the tip of the iceberg. Once that’s over, the bulk of your back and forth with sellers begins.
- Timeline or length of escrow – Be prepared, the sellers will want a quick and speedy escrow because they are on their way out. However, as a buyer, you will benefit from a longer escrow period to ensure any problems with the home are resolved and your loan is handled correctly.
- Inspections – It is crucial to have an inspection done on a home before you buy – it is standard in all home sales today. You and your agent should work on a list of contingencies to put into your purchase contract based on the findings of an inspection.
- Home Warranty – The home warranty can be paid for by seller or buyer. While the warranty is to your benefit, some sellers are willing to pay for it as a way of preempting any further responsibility on their own part in the event that there are problems with the home post-closing.
- Closing Costs – These costs can be paid by either party but in a seller’s market, you might offer to pay these in order to sweeten your offer.
- Repairs – Based on the home inspection you will come up with a list of repairs. What it comes down to is asking the sellers to fix any problems that arise or negotiating a lower price.
If you’re searching for a new home and want to save yourself hassle and money, contact an expert First Team agent. Not only are our agents here to help you find a home, but they’re also dedicated to guiding you through the home buying process while keeping personal needs first.
Buyers – What are your worries when it comes to negotiating a home purchase?
Agents – What else do buyers need to know before entering into negotiations?