Negotiating with the seller is always worth trying, even in a hot housing market. Don’t be afraid to offer lower than the asking price and negotiate up! As mentioned earlier, plan for your
How to Negotiate a Home Price
Dated: December 12 2020
Negotiating with the seller is always worth trying, even in a hot housing market. Don’t be afraid to offer lower than the asking price and negotiate up! As mentioned earlier, plan for your first offer to have a little wiggle room.
Other than straight-up negotiating the amount, here are some other ways to negotiate the overall price:
- As mentioned, being light on contingencies in your offer letter is more appealing to the seller. There’s room for negotiation. For example, you could agree to a closing date that suits the seller if they’re looking for a quick sale.
- If it’s a competitive market and the seller wants to know you’re serious about the house, they could ask for more earnest money in their counteroffer but agree to the price you’re offering for the house.
- One common negotiation tactic is to ask the seller to waive or pay for certain closing costs.
- If you’re paying in cash, a strong cash offer can be a good bargaining chip when placed against other offers that are more precarious or have more contingencies—even if they are slightly higher.
Don’t worry: A good real estate agent will be able to guide you in the right direction on these!
Being light on contingencies in your offer letter is more appealing to the seller.
Making Negotiations After an Offer Has Been Accepted
Keep in mind that negotiations don’t have to end once you’ve agreed on the purchase price. Let’s say the home inspection reveals a few minor issues the seller should fix before closing the deal.
But maybe the seller has no time to make repairs because they’re moving out of state and has too much going on. At this point, you could ask for something in exchange for taking care of the repairs yourself—like credit from the seller or an appliance to be included in the deal.
And what if the appraisal from your mortgage lender comes back with a value that’s less than the agreed-upon sale price? The seller will have to agree to match the appraisal value or the whole deal could fall through. It’s not final until the sale is final!
What to Do in a Bid Situation
Unfortunately, if your dream home is also other buyers’ dream home, you could find yourself in a bid situation. This is when the seller receives more than one offer at the same time.
Here’s what could happen:
- The seller could ask the buyers with the highest offers to come back with their best possible offers by a set deadline. The seller will look them over and come to a decision.
- The buyers with the highest offers will compete in a bidding war to see who is willing to make the most appealing offer on the house. This could be the highest offer, but it could also one be the one that’s lightest on contingencies.
The good news is that there are a few things you can do to let the seller know you’re willing to beat the competition. Here are some things you can try:
- Offer to top the highest bid by $1,000 up to a certain amount. This way, you run less chance of being outbid by anyone.
- Pay for the house in cash. This reduces closing costs and brings closing day faster—which is probably in the seller’s best interest if they’re trying to buy another home at the same time.
- Increase the amount of your down payment and/or the earnest money percentage.
- Remind the seller why you love their home. If you sent a handwritten letter, point back to that! People like to think their cherished home is going to be loved and cherished by the next seller.
- If you’ve been preapproved for a mortgage, mention it again. That way, the seller knows there’s less of a chance that your financing could fall through at the last minute.
Tip: Resist the urge to contact the seller yourself. They’re probably under a lot of stress and you might make things worse. It’s wise to let your agent present your case to their agent.
Make Your Offer Count With a Real Estate Expert
It’s important to have the best agent on your team when you’re buying a house. From searching for the best home to putting in that offer, a good agent will be able to scan the market, look at the house in detail, and work with you to present your strongest offer.
"Your Legacy Begins At Home" Janette and Doug and their Friend Team have more than a real estate practice; they have a mission called "Your Legacy Begins At Home". The mission combines years of real ....