When it comes to buying a house, the price is always negotiable! Whether you’re a first-time homebuyer or a seasoned pro, there are a few tips you can use to make sure you get the best price possible.
You don’t have to be the wolf of wall street to make sure you get the best deal on your house purchase. With just a little planning and research, you can enter into negotiations from a much stronger position.
Do Your Research
Negotiating the price of a house can be a daunting task, so it is important to do your research and due diligence before entering into negotiations. This way, you’ll have more of the information you need, reducing the intimidation factor.
One of the main ways to achieve this is to establish the current market value of the house you are interested in. You can do this yourself by looking up recent comparable sales in the area. If you find a house of a similar size and condition which has recently sold in the same area, there’s a good chance the one you are interested in has a similar market value.
It would also be wise to consider wider trends in the local housing market – are prices generally going up or down? Is the crime rate rising or falling? And what about the levels of employment and the health of the local economy?
Get an Inspection and Appraisal
Before you start negotiating on house prices, it can be helpful to have an inspection done. This will help flag up potential problem areas such as repairs that need to be made, structural damage, or faulty fixtures and fittings.
Another way to assess the market value of a property is to have it appraised by a real estate professional. Although this will involve extra costs, it can be used as more concrete proof of the potential value of a property when engaging with the seller.
If the appraisal value comes in lower than the asking price, you may be able to use this information as leverage to negotiate a lower purchase price for the property.
When we form our cash offers for houses, we ask a few simple questions about the property and its condition. If you are interested in receiving a cash offer for a home quickly – get in touch.
Know Your Walk-Away Price
Once you have a figure in mind for the market value of a property, you are in a stronger negotiating position on a couple of fronts. Firstly, you know the price above which you should probably walk away. Paying above the market price rarely makes sense, because it means your investment will almost immediately fall in value after the sale is complete.
And secondly, you have a better idea of where you might want to start the negotiations off. Making an initial offer in the region of 10-20% lower than what you believe the market value to be will help you get the best deal possible and allow you to feel out the seller.
In addition, take a look at your budget and get a realistic idea of what you can afford. Keep in mind that this should also factor in the cost of renovations, closing costs, and moving expenses.
Leverage a Genuine Reason for Wanting the Property
It’s much easier to negotiate when you have a genuine reason for wanting the property. If you can show that you really need or want the property, the seller will often be more likely to give you a break.
Some examples of genuine reasons include:
- The property is in a good location for your work or children’s school.
- The property is the right size for your family’s needs.
- The property has features that you really want, such as a garden for children to enjoy or wheelchair access.
If you can satisfy the seller that you have one or more these genuine reasons for falling in love with their property, you may just play on their heartstrings enough to secure a discount.
After all, selling a property does not always simply come down to money. If a seller has formed an emotional tie to a property after inhabiting it for many years, they will often allow for a little wiggle room on the price if they are sure it is going to an owner that will cherish it in the same way.
Be Prepared to Compromise
It’s very rare that both parties involved in a negotiation will be 100% happy with the outcome. In order to come to an agreement, both sides need to be willing to give up something. By being prepared to compromise, you’ll be in a much better position to negotiate a fair deal.
Listen to the other person’s offers and counteroffers. It’s important to be respectful and listen to what the other person is saying. Even if you don’t agree with their offer, it’s important to understand their position. By listening carefully, you’ll be in a better position to make a counteroffer that meets both of your needs.
Make sure to be reasonable with your offers. Don’t try to low-ball the other person or make an offer that’s far below the market value. Not only is this rude, but it will likely result in the other person walking away from the negotiation. Instead, make reasonable offers that are based on market value and other concrete information you have gathered. Often this includes offering to take care of closing costs if the seller will agree to a discount.
Get Everything in Writing
It’s important to have a written record of what was agreed upon during negotiations. This will protect you legally if there are any disputes later on. Make sure to document everything including the price that has been agreed to, and any other conditions such as repairs or responsibility for closing fees.
It’s a good idea to have a realtor or attorney review any final agreements before you sign them. This is especially important if you are not familiar with the legal process. This will help you understand the agreement and make sure that it is fair and serves your best interests.
Be Firm, But Fair
It’s important to be assertive when negotiating. Remember, you’re trying to pay the best possible price for your new home. But, it’s also important to be fair. If you’re too aggressive, the other person may feel like they’re being taken advantage of. Conversely, if you’re too passive, you may end up paying more than you should.
Here at Highest Cash Offer, we do all we can to make sure our cash offers for houses are fair and acceptable to sellers. If you’re looking to receive a cash offer for your property, we operate across the USA and Canada.
Hire an Experienced Real Estate Agent
An experienced and resourceful real estate agent can be an extremely valuable part of the house-buying process for home buyers. First of all, they introduce a degree of separation between you and the sale, meaning they’ll be able to look at the situation objectively and deal with it without as much emotion as you might yourself.
Secondly, with experience in both the local housing market and sellers in general, a real estate agent will quickly be able to determine where there is room for negotiation and where there isn’t. This will save you a lot of time by quickly filtering out sellers who you are unlikely to ever come to an agreement with.
Get Preapproved for a Mortgage
Finally, proving to a property seller that you will be able to secure finance quickly and easily if they accept your offer can be extremely valuable. If you’re competing with another buyer who doesn’t have as much certainty when it comes to the ability to finance the deal, you could win out even if your offer is a little lower than theirs.
You can achieve this by obtaining a preapproval letter from your mortgage lender – after assessing your financial situation and receiving their decision, the letter will set out the size of mortgage you have already been approved for, and communicate to the seller that you can close the deal quickly.
By bearing these tips in mind, you will be more prepared than ever to advocate for yourself and negotiate a great deal. Buying a house is not an easy process, but armed with research on the local market and the right information, you’ll be unstoppable!