Buying a new home is exciting but can sometimes be overwhelming. Knowing how to effectively negotiate with the seller can go a long way towards increasing your confidence and reducing stress.
Here are five tips for improving negotiations with home sellers.
1. Start with the right price
There's a lot to consider when determining the purchase price to offer including the home's value now and the price of the home when the seller purchased it. You should also know comparable sales prices in the area. Your realtor can help you determine all of these amounts. How long the house has been on the market, whether it's already been reduced in price, how quickly the seller needs to move and whether there are multiple offers on the house can all affect the price you offer. If a completed property inspection is available, review it before negotiating as this may also affect the price you offer.
2. Be on the same page
You and your spouse need to be in complete agreement on the amount you're willing to pay for the home and any concessions you're willing to make before sitting at the negotiation table. If the seller observes any disagreement, he can use that to his advantage by thinking he has to convince just one of you rather than both.
3. Don't reveal too much
Keep your reasons for wanting to purchase the house to yourself. The more the seller's agent knows about your motivation, the bigger the seller's advantage. The seller doesn't need to know that you need to purchase a home quickly or that you want your children enrolled in the neighborhood schools or that you're recently divorced or widowed. So don't reveal it. Nothing says you have to.
4. Don't get in over your head
Don't waste time negotiating on a home you really can't afford. Keep your emotions under control and keep looking until you find something that's within your budget. You'll be glad you did.
5. Be Realistic
Always be reasonable in what you offer the seller. Most sellers have a pretty good idea of their home's value. Offering a price that's way too low may irritate the seller. Once that happens a seller is usually less inclined to work with the buyer. Be fair and be realistic and you'll benefit more when it's time to negotiate.