When it comes to buying or selling a home, negotiation is the name of the game. But what happens when one party gets too aggressive? Here’s what you need to know about negotiating with a seller during your home purchase. These do’s and don’ts can make or break your deal.
When You Should Negotiate
Whether you are a first-time homebuyer or a seasoned veteran, the negotiation part of the transaction can be a little daunting and stressful. However, it is necessary to ensure you are getting the best possible deal for your money. So, what should you negotiate when buying a home?
DO negotiate closing costs
Ask the seller to agree to cover some of the closing costs. Closing costs can amount to anywhere from 2% to 5% of the sale price of the home. If your available cash is limited getting a credit towards closing costs can increase your purchasing power. Many sellers will be willing to provide a credit especially if the credit is offset by a slightly higher purchase price.
Keep in mind if you’re trying to buy a home with multiple offers, negotiating a seller credit may not be a wise decision. Additionally if you’re purchasing a luxury home at a high price point requesting a seller credit may cause the listing agent and seller to question your ability to qualify for the home.
DO negotiate keeping the furniture
If you fell in love with the home decor and the home wasn’t furnished by a staging company (meaning the furnishings are rented), it’s worth asking the seller to sweeten the pot by throwing in some furniture. If they are downsizing, or moving out of state or country, they may not need large furniture pieces or appliances and could be more than happy to make them part of the deal.
DO negotiate the inspection and closing timeline
If you have your financing already preapproved, and a home inspector lined up, agreeing to quicker closing can make a buyer very happy and more inclined to offer flexibility in the purchase price or seller credits. Before you do this make sure you’re communicating a reasonable timeline with your lender.
Another option is to do a pre inspection. By doing the inspection prior to making the offer you can waive your home inspection contingency without risking buying a home without an inspection. Obviously the downside would be the wasted cost of the inspection fee if you don’t end up getting an offer accepted.
When to Pause Your Haggling
At a certain point, being a hard-core negotiator can sour a deal and build resentment. Know what you want going in, and lay out all your requests at once. Be clear about your contingencies, and keep your ego in check. Figure out your non-negotiables ahead of time and list what items you’re flexible on.
DON’T negotiate in bad faith
A lowball offer to test the waters can be insulting, and damage your reputation as a buyer among both sellers and agents. You don’t have to offer full price but throwing out a really low ball offer on a home that was recently listed won’t get you very far and is a waste of time for all parties.
DON’T negotiate incrementally
Raising your offer by a thousand dollars at a time is tacky and unappreciated. Decide where your ceiling is, and divide the difference between your lowest and highest offer into no more than two additional touchpoints. This allows you some wiggle room without dragging out a process and annoying the seller.
DON’T issue ultimatums
A “take it or leave it” aggressive attitude can lead to a hard “leave it” response that won’t be walked back later, even if the seller relents on the price. They’ll opt to sell to someone else for less than come back to you after such irritating treatment.
Negotiate in good faith, and you could come up a clear winner. Screw up in the negotiation phase, and you could find yourself kissing your dream home goodbye.
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