EXPOSED! - The 3 Rules of Negotiating with a Home Seller
Darren Meade
January 22, 2007
EXPOSED! - The 3 Rules of Negotiating with a Home Seller
Negotiating - a word that strikes fear into the hearts of most homebuyers. If you are like most people, when you hear the word negotiating, you cringe, picturing a heated confrontation where tempers flare and big numbers are volleyed back and forth across the table.
It doesn't have to be that way. It's perfectly reasonable to expect the seller to make some concessions while you do the same. Meet in the middle.
Negotiating Tip #1 - Be Realistic
When entering a negotiation with a Home Seller, you need to be Realistic. If the house you are looking to purchase has 6 bids already, your chances of getting thousands of dollars slashed from the price are slim. Negotiating in these cases may prove to simply be a waste of your valuable time. This is especially true in hot markets like Boston, San Diego and Miami.
Even in a case where the home seller is willing to make concessions, and you have a strong bargaining position, you should never attempt to 'go for the throat'. Be reasonable. If you know the home is priced $3,000 above what you are willing to pay, tell the Seller that the home is priced $3,000 too high, but that you would be willing to sign a Purchase Agreement today if the Seller were to bring the price down $1500. This way, it's a win-win all around. The seller is happy and you walk away content in the knowledge that you successfully slashed $1500 from the home price.
Negotiating Tip #2 - NEVER Show Your Cards
Remember the old country song by Kenny Rogers that goes 'you've got to know when to hold em' and know when to fold em''? It's true with Poker and it's certainly true in Real Estate negotiations.
When you walk into the home of your dreams, don't scream out, 'oh it's beautiful - I'd do anything for a house like this!' Around the Seller and the Seller's Real Estate Agent, keep your emotions in check. If the Seller is aware that you are in love with the home, they will have a strong bargaining position. But if they think there is a chance you will walk away from the table, they will be more willing to negotiate on your terms.
Negotiating Tip #3 - Do Your Homework
It's time to go to school. First, you need to make a checklist of everything you want in a home and then prioritize the list. Amenities you can't live without should top the list and then the other items should be listed in descending order of priority. If you know what you want before you start, it will make the entire process easier, and give you an idea of how much leeway you have in negotiating (i.e. if you are in love with a home and it has everything on your list, you may be less apt to try and haggle the Seller's price down).
You also need to be aware of what market conditions are like in your area. Take this simple quiz and see if you know the answers:
1.) Are you aware of the supply and demand statistics of home inventory vs. sales made this year?
2.) Are you aware of what % of total homes listed for sale actually sold last month
3.) Are you aware of how the total % of homes sold last month can positively affect how you structure your purchase offer?
4.) Have you assessed the best use of your cash and planned to maximize your leverage?
In short, have you prepared a Home Purchase Strategy? We participate in many real estate transactions every month. Over time, we've learned a thing or two. Our staff would like to help you develop your personal strategy and consequently help you save thousands of dollars in the process.
We call this our Home Buyers Coaching Session®. We put our experience to work for you, preparing you to make an informed, money saving offer. We do this at no cost.
Why? Simple - if we do a good job helping you prepare, maybe we can earn your mortgage business. We are sure willing to try. Are you willing to spend 30 minutes with us?
Don't wait, Request your NO-COST Home Buyers Coaching Session NOW. Visit our website and we'll contact you right away to schedule your appointment.
Negotiating - a word that strikes fear into the hearts of most homebuyers. If you are like most people, when you hear the word negotiating, you cringe, picturing a heated confrontation where tempers flare and big numbers are volleyed back and forth across the table.
It doesn't have to be that way. It's perfectly reasonable to expect the seller to make some concessions while you do the same. Meet in the middle.
Negotiating Tip #1 - Be Realistic
When entering a negotiation with a Home Seller, you need to be Realistic. If the house you are looking to purchase has 6 bids already, your chances of getting thousands of dollars slashed from the price are slim. Negotiating in these cases may prove to simply be a waste of your valuable time. This is especially true in hot markets like Boston, San Diego and Miami.
Even in a case where the home seller is willing to make concessions, and you have a strong bargaining position, you should never attempt to 'go for the throat'. Be reasonable. If you know the home is priced $3,000 above what you are willing to pay, tell the Seller that the home is priced $3,000 too high, but that you would be willing to sign a Purchase Agreement today if the Seller were to bring the price down $1500. This way, it's a win-win all around. The seller is happy and you walk away content in the knowledge that you successfully slashed $1500 from the home price.
Negotiating Tip #2 - NEVER Show Your Cards
Remember the old country song by Kenny Rogers that goes 'you've got to know when to hold em' and know when to fold em''? It's true with Poker and it's certainly true in Real Estate negotiations.
When you walk into the home of your dreams, don't scream out, 'oh it's beautiful - I'd do anything for a house like this!' Around the Seller and the Seller's Real Estate Agent, keep your emotions in check. If the Seller is aware that you are in love with the home, they will have a strong bargaining position. But if they think there is a chance you will walk away from the table, they will be more willing to negotiate on your terms.
Negotiating Tip #3 - Do Your Homework
It's time to go to school. First, you need to make a checklist of everything you want in a home and then prioritize the list. Amenities you can't live without should top the list and then the other items should be listed in descending order of priority. If you know what you want before you start, it will make the entire process easier, and give you an idea of how much leeway you have in negotiating (i.e. if you are in love with a home and it has everything on your list, you may be less apt to try and haggle the Seller's price down).
You also need to be aware of what market conditions are like in your area. Take this simple quiz and see if you know the answers:
1.) Are you aware of the supply and demand statistics of home inventory vs. sales made this year?
2.) Are you aware of what % of total homes listed for sale actually sold last month
3.) Are you aware of how the total % of homes sold last month can positively affect how you structure your purchase offer?
4.) Have you assessed the best use of your cash and planned to maximize your leverage?
In short, have you prepared a Home Purchase Strategy? We participate in many real estate transactions every month. Over time, we've learned a thing or two. Our staff would like to help you develop your personal strategy and consequently help you save thousands of dollars in the process.
We call this our Home Buyers Coaching Session®. We put our experience to work for you, preparing you to make an informed, money saving offer. We do this at no cost.
Why? Simple - if we do a good job helping you prepare, maybe we can earn your mortgage business. We are sure willing to try. Are you willing to spend 30 minutes with us?
Don't wait, Request your NO-COST Home Buyers Coaching Session NOW. Visit our website and we'll contact you right away to schedule your appointment.
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