You are ready to make the big decision and buy a home. There are several things that you need to do in order to get the contract -- and the house -- the way that you want it.
Negotiation Goals
Negotiations take place between the buyer and the seller. If you are a good negotiator, you can expect to get what is rightfully yours, but also have to work with the seller to get the contract signed. Working together to solve problems is a crucial mindset.
Your goal is to get the best total price on the home, as well as getting into it in the right time period. The seller's goals are to get the most money OUT of the house and to move on HIS schedule.
While you may think that a home is worth less than the asking price, the seller usually thinks his home is worth more than it actually is. The fun thing is finding the right middle ground.
Negotiation Tips
1. If you feel that the home is not worth the price, and you have reasons to justify it, let your real estate agent know. Your agent will talk with the other agent about these blemishes. You should bid on the home at a lower price because of the imperfections, but do not insult the seller with an outrageously low rate. That's the perfect way to get them not accepting your offers at all.
2. Be prepared to solve any repair, title, survey or loan problems fairly and quickly to prevent future problems at closing. Determine who will make repairs and what the price of the home will be as a result.
3. Don't get emotional. In the offering and counter offering steps, the seller can walk out at any time if you make negative comments or become angry with them. Instead, work together to come to an agreement.
4. Don't respond too quickly. Carefully consider the sellers' arguments or statements -- first understand them, then delve deeper to examine motives, finally express your well considered response.
5. Listen and understand what the seller says -- he will often give you the clue that brings everything together. I once saved several thousand dollars because the seller was stuck on getting a certain price for his house -- I simply got him to agree to pay all closing costs instead of the customary half. He was happy because he "got his price," and I was happy because I saved money.
6. Find out the seller's needs. The buyer must be able to appeal to the seller's concerns.
7. Make sure to have any unclear portions of the proposals clarified completely.
8. Never discuss your personal issues that indicate a vulnerability, such as an urgency to move in or a financial problem.
9. Try to find a common ground with the seller. This can be a very powerful tool used to the buyers' advantage in the event of multiple offers. Often a seller may select a buyers' contract for sentimental reasons, for example if the buyers remind the sellers of themselves when they were a young couple.
10. Convey an appreciation for some aspect of the house that reflects the seller's taste. For example the decorating.
11. Respond to counter offers within a reasonable time frame.
12. Look for leverage points. One example is if the house has been on the market for over 300 days, the buyer will have a lot more leverage than they would have with a brand new listing.
13. Work with your agent to find the right terms for the negotiation.
14. Get help when it comes to making that first offer. Make sure that you ask your agent what the value of the home seems to be, based on appraisals and the home inspection. Most buyers will offer less than the asking price in the hopes of getting the home to come down in price some. Don't go too low though, as you could offend the homeowner and cause them to refuse to deal with you altogether.
By working with the seller throughout this process and offering the right amount, you will soon have the home of your dreams, without going through a nightmare to get it.
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