You’ve done your homework. You know what price point the sellers will hit at, and you’re ready to negotiate. But just like any ball game, sometimes you need to be ready for the curveballs. Having a negotiating strategy in place before you make an offer is an effective way to getting what you want (and for setting the right expectations).
It’s also important to remember that you’re not a benched player in this process. Negotiating a home deal requires both the expertise from your agent and your awareness (for what you want). That’s why we’re going to provide you with some high-level tips on setting a negotiation strategy with your agent.
Here are our negotiating suggestions, based on the outlook of the market:
Negotiating in a Buyer’s Market
A buyer’s market refers to a time when there are more houses for sale than there are buyers shopping. As a result, home sellers have more competition from other homeowners and try harder to attract buyers like you. Some things they’ll do is lower their price tag, offer extra incentives in the contract, and be more pliable to negotiating. Essentially, their home might end up sitting on the market for longer than they want, so they’ll be eager to sell – which means potential deals.
Strategy Suggestions: Don’t Be Shy in Negotiating
- Bargain with the owner on the home price.
- Ask the seller to pay closing costs and chose a closing time beneficial to you.
- If you interested in the appliances or home entertainment system, see if the owner will sell them with the house.
Negotiating in a Seller’s Market
A seller’s market isn’t a place for aggressive negotiations for most buyers. This is a time where there are fewer houses for sale, but plenty of buyers going around. So, if you’re interested in a house, you better lay your best offer on the table from the get go. Otherwise, you might get beat out by a better offer from another party. In this situation, sellers aren’t inclined to negotiate because they can easily find another buyer for their house.
Strategy Suggestions: Make a Straightforward “Best” Offer
- Be pre-approved for a mortgage loan, so sellers know you’re good on the offer.
- Offer asking price or close to it.
- Don’t expect to receive any extra incentives, like obtaining the home’s appliances (unless the seller wants to give them up).
Negotiating What You Want
Sometimes the real estate market is balanced. If may not favor either the buyer or the seller, so it’s important to do your homework first. Gather as much data as possible, consult with your agent, and split the difference with the seller. You will most likely gain something in the negotiations, but always expect to give something up as well. That’s why it’s important to know your bottom line and your priorities before entering negotiations. If you have any questions, feel free to contact us.