For most people, the purchase of a home is the largest single purchase they will ever make. For this reason, a little negotiation may easily result in a difference of four or even five digits in the price of the home. Since seller listings are almost always found right beside other offers, they generally tend to be competitive. However, this does not mean that prices are set in stone. For both buyers and sellers, a few key skills and practices can help tremendously when it comes to asking for – or resisting – a lower home price.
1. Do Your Homework
Look into home prices in the area. Compare the price of the house being offered to the prices of those of similar size and quality nearby. Look at things like crime rates and the tendency of flooding, earthquakes etc. Ask people in the neighborhood how they like it. Determine the distance from necessary destinations such as hospitals and clinics, schools and grocery stores. All of these factors can drastically change the home's value in your eyes. Even if a particular detriment is not much of an issue for you, knowing about it and mentioning it can help you to get the seller to bring down the price.
2. Investigate The Seller
Find out as much as you can about the seller's situation and needs. You may do this by asking neighbors – in a casual way – about the seller. You can also ask the seller yourself. After all, when you meet the seller face-to-face, the natural thing to do is ask about that person's profession and career. Despite the casual nature of such questions, however, they can reveal a lot about that person's financial situation. Even if the seller does manage to hide details about his or her financial situation in conversation, such details can also become evident when you tour the property. For instance, if the seller is still living there, it should still feel like a normal living situation. However, if much of the furniture is gone or if the seller is not spending money on heating and cooling, this can be a sign that the seller desperately needs to sell and may settle for a lower price.
3. Investigate The Property
When you tour the property, make sure to look for things that could bring down its value. Damage to wooden structures, peeling paint, plumbing problems, pests, structural weaknesses and other issues can take their toll on home values. Take a written checklist with you when you view the property and make it very apparent that you are paying attention to such details. If the seller sees that you are aware of items that make the property less valuable, he or she may be more willing to knock some off of the price.
4. Reveal Little About Yourself
When you speak with the seller – particularly when you are trying to get information from the seller – be careful not to reveal too much information about yourself. Just as sellers may not want you to know about their financial troubles, you should not want sellers to know about your financial means. For instance, if you make several times the average annual income or if you intend to pay in cash, revealing these facts to the seller shows the seller that you are probably quite capable of paying the asking price. Instead, try to put yourself on the same level of the seller. Try to identify with the seller and show that you have similar everyday concerns.
5. Pay Attention To Timetables
One important thing to take into account is when the house was first listed and how long it has been for sale. If the house has been for sale for many months but the asking price remains the same, this is a good sign that the seller may be willing to settle for less.
6. Maintain Multiple Options
Stay on the lookout for multiple properties that you would be happy with buying. The first reason to do this is to ensure that you do not end up paying too much for a property when you could get a similar property for considerably less. Another reason for doing it is that it helps with negotiations. If the seller knows you are looking at other houses, he or she may be more willing to bargain. Feel free to mention other houses that you are looking at when you talk to the seller. As a seller, make sure to mention any other potential buyers who are considering the home as this can help to drive home a sense of urgency.
7. Make Smart Offers
When you make your initial offer for a home, do so in writing and give a price range instead of a specific price point. Putting your offer in writing gives the seller something physical to look at and contemplate while giving a range instead of a specific amount helps keep you from angering the seller with an unrealistically low bid and still allow for further negotiations in the future.
8. Move Early
Try to show your interest in a property and make an offer early on. Even if the offer is too low for the seller to accept initially, showing such motivation and assertiveness can help to build rapport with the seller. In some cases, sellers feel a sense of obligation to sell to the person who made the initial offer. Even if your initial offer is not accepted, the seller may contact you in the future to negotiate a lower price.
9. Start Over If Necessary
Regardless of how far or how long negotiations have run, if you are not satisfied with the outcome, remember that you can still pull out and look for another offer. It is better to anger a seller – with whom you have made no commitment – than to agree to a sale that is not in your best interest. Throughout the process, do not lose sight of what you are willing to pay and what you think is fair.
Keep these tips in mind when you are on the market for a home. They may just help you to snag a great deal on your new house.