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There are few things that depend on good information and strategy as much as a home purchase. If you're about to buy a house, developing a negotiation strategy early will make the process easier. Here are a few tips to keep in mind.
According to a 2002 report by the National Association of Realtors®,
nearly four out of five home buyers used a real estate agent as an important information source and to assist in the transaction.
The easiest way to buy and negotiate a home purchase is to find a real estate agent you can trust. Besides guiding you through the process of home buying, a real estate agent can help you understand everything from home loan options to the local housing market. Perhaps an even more valuable tool when negotiating a home purchase is having the right information.
Information is Power
Getting ready to buy a house takes time, and you may miss important details by hurrying through the process. If you find a house you like, have your real estate agent prepare a Comparative Market Analysis of that particular house. This is the same home valuation information the seller used to prepare their asking price. This information will either reveal whether the house is a bargain or over-priced. With the CMA in hand, you have bargaining power if and when you need to negotiate with the seller.
Getting ready to buy a house takes time, and you may miss important details by hurrying through the process. If you find a house you like, have your real estate agent prepare a Comparative Market Analysis of that particular house. This is the same home valuation information the seller used to prepare their asking price. This information will either reveal whether the house is a bargain or over-priced. With the CMA in hand, you have bargaining power if and when you need to negotiate with the seller.
Motivational Factors
It is important to remember that both the seller and buyer in any deal are motivated by different, and sometimes, competing factors. As a buyer, you should make it a point to learn the homeowner's motivation for selling. If they've already bought another house, chances are that they're motivated by time and money, but if they're still looking, they may be firmer with their asking price.
It is important to remember that both the seller and buyer in any deal are motivated by different, and sometimes, competing factors. As a buyer, you should make it a point to learn the homeowner's motivation for selling. If they've already bought another house, chances are that they're motivated by time and money, but if they're still looking, they may be firmer with their asking price.
To Care or Not to Care
A good tactic to use in negotiations is to take emotion out of the equation. As is often the case, he who cares least, wins most. If a seller thinks that you're not in a hurry to buy a house or you're only minimally interested in their property, they might realize that they can't be too demanding. If a seller knows you're in love with the house, they might hold out until they get what they want. There aren't good guys and bad guys in a home sale; there are only people looking for the best deal possible. Buying and selling a house is a lot like a game of poker. Your odds of winning increase when you use your best poker face and avoid showing your opponent your hand.
A good tactic to use in negotiations is to take emotion out of the equation. As is often the case, he who cares least, wins most. If a seller thinks that you're not in a hurry to buy a house or you're only minimally interested in their property, they might realize that they can't be too demanding. If a seller knows you're in love with the house, they might hold out until they get what they want. There aren't good guys and bad guys in a home sale; there are only people looking for the best deal possible. Buying and selling a house is a lot like a game of poker. Your odds of winning increase when you use your best poker face and avoid showing your opponent your hand.
Appealing to a Higher Power
Make sure your realty professional is aware of any roadblocks that stand in the way of your offer to buy a house. Deals in which a seller must appeal to an unavailable higher authority such as a spouse, attorney, or another third-party, often fail. Try to time your offer so all the decision makers are available.
Make sure your realty professional is aware of any roadblocks that stand in the way of your offer to buy a house. Deals in which a seller must appeal to an unavailable higher authority such as a spouse, attorney, or another third-party, often fail. Try to time your offer so all the decision makers are available.
One Against The Other
Avoid sellers who pit one buyer against another. If you, or your real estate agent, discover that another buyer has submitted an offer on the same property, hold off and see how things work out. As a buyer, getting caught in a bidding war could be costly, since informal auctions like this rarely ever favor you. If you do find a home you like and a bidding situation arises, one strategy that can pay off is to have a mortgage commitment in hand and be willing to close in 30 to 60 days. Yet another way to increase your chances of offering a winning bid is by not making too many contingencies, such as requesting a long escrow, demanding that the seller make certain repairs, or preserving your option to back out if your current home doesn't sell.
Avoid sellers who pit one buyer against another. If you, or your real estate agent, discover that another buyer has submitted an offer on the same property, hold off and see how things work out. As a buyer, getting caught in a bidding war could be costly, since informal auctions like this rarely ever favor you. If you do find a home you like and a bidding situation arises, one strategy that can pay off is to have a mortgage commitment in hand and be willing to close in 30 to 60 days. Yet another way to increase your chances of offering a winning bid is by not making too many contingencies, such as requesting a long escrow, demanding that the seller make certain repairs, or preserving your option to back out if your current home doesn't sell.
You Can't Hurry Love
Buying a home is an exciting ride, often filled with ups and downs. It starts with the home appraisal and doesn't end until you're moved in. If you take your time to find a real estate agent, a few prospective homes, and several home loan options, you'll most likely get through the process without much trouble.
Buying a home is an exciting ride, often filled with ups and downs. It starts with the home appraisal and doesn't end until you're moved in. If you take your time to find a real estate agent, a few prospective homes, and several home loan options, you'll most likely get through the process without much trouble.
Edward Castro has extensive experience as a creative media writer. His client portfolio has included such notables as Hewlett-Packard, Sony Computer Entertainment, Shockwave, AtomFilms, GameBlast and Mervyn’s California. In his current position, Ed is developing the marketing strategy of an Internet start-up company specializing in Japanese trade goods.