So you’ve been house hunting and have finally found your dream home has popped up on the market. In this market, landing your dream house can be a daunting task, especially if you want to negotiate the best deal you can.
Let’s break down the negotiation process and take a look at some expert advice on effective negotiation as you go through the home-buying process.
What is Negotiating? Why is it Important?
According to Investopedia, “The term negotiation refers to a strategic discussion intended to resolve an issue in a way that both parties find acceptable. Negotiations involve “give and take”, which means one or both parties will usually need to make some concessions.”
As you prepare to find and buy your dream home, you will need to learn about the art of negotiating in order to land potential price reductions and get the best price you can!
Negotiating when you are buying a house is important because it helps you make informed decisions and avoid overpaying on a property. Oftentimes, a seller will set the asking price a little higher or lower than what they expect to get. Depending on the current market conditions, negotiating can mean the seller gets more than the asking price and the buyer pays less than the asking price.
Negotiating is important for both buyers and sellers.
5 Pro Tips to Crush the Negotiation Process
If you’re ready to start hunting for your dream home, here are 5 pro tips that can help you negotiate the best deal on your dream house.
1. Do Your Research and Prep Work
First and foremost, a serious buyer will have done their research and prepared adequately before writing an offer.
Careful research is a vital component of negotiating and can have a large influence on the final purchase price. As you conduct research, here are some things you will want to keep in mind and focus on:
- The property’s condition
- current market conditions + market value
- current mortgage options
- the seller’s motivations
- average prices of comparable properties
All of these things can provide insights and valuable information that can help you as you negotiate your dream home.
Get Pre-Approved For Your Mortgage
One important step you can do to prepare to buy a house is to get a pre-approval letter from your mortgage broker. When a house on the market gets tons of offers, it can be hard for the seller to sift through them all. According to Market Business News, “[Pre-approval] shows the seller that you’re a serious buyer who has the financial means to purchase the property.
Additionally, pre-approval can set a solid foundation as you look for a home and write offers.
Set Your Non-Negotiables and Deal Breakers
Anytime you go into a major purchase, you will want to figure out your non-negotiables. These are things you are not willing to bend on when it comes to buying a house. For example, maybe you need a home inspection in order to finalize your offer. If the seller were to come back asking you to skip the inspection, you would not budge on this as it’s a non-negotiable for you.
Setting these things can help you make the best decision for your situation and budget.
2. Know Your Numbers
Another pro tip for negotiating the purchase price of a home is to know your numbers. Getting the best price isn’t just about offering the lowest number or offering the most you can afford. There are all types of numbers to consider.
Set and Stick To Your Budget
First, you should set your budget. One of the biggest mistakes people make when buying a home is spending way more than their budget. This can result in debt and higher taxes.
When you set your budget, you should consider what you can realistically afford in your current financial situation and the maximum price you are willing to pay on a property. Great negotiation skills should result in your closing a deal within your budget.
Consider the Asking Price and Purchase Price of Other Properties
Additionally, comparable property values can provide valuable insights as you prepare a budget or initial offer. Recent sales and purchases from other buyers can help you understand what to expect when you begin negotiations on a property.
Look at the Local Market and Market Trends
Finally, understanding the local market is vital to making an informed decision. Whether it’s a seller’s or buyer’s market, you will need to consider what is going on in the real estate market so that you are adequately prepared to write an effective offer.
3. Start Strong but Consider A Compromise
The first offer is the most important. According to Donna Bulika “When initiating the home-buying process, crafting a robust initial offer sets a positive tone for negotiations.” A good first offer should be strategic yet inviting to the seller. You want them to be intrigued enough to respond to it instead of throwing it aside for a stronger offer.
However, don’t be afraid to compromise and find a middle ground. Especially if you negotiate other terms outside of a price reduction, you could end up with a win-win solution for both parties.
Building a Strong Negotiation Strategy
Your negotiation strategy should combine accurate data and facts with a bit of personality as you cater to the seller’s motivations. Sometimes, to negotiate the best deal, you need to utilize creative solutions, like employing active listening and storytelling in your negotiation conversations.
4. Understand the Art of Leveraging
Another key component in a great strategy is leveraging. Shapiro Negotiations describes leveraging as, “the power or advantage a party has in a negotiation that can be used to sway the outcome in their favour. Information, resources, alternatives, and relationships are all factors that can contribute to negotiating leverage.”
Understanding the other party is vital to successful leveraging and can go a long way when securing a better price.
5. Work With a Real Estate Agent
Finally, the best way to secure a great deal on your dream home is with a real estate agent. A good real estate agent is experienced in negotiation situations and can help you land a better price and stronger financing options.
Additionally, agents have a strong understanding of the local market, market trends, leveraging options, and other factors that can help you during negotiations.
Want to Find Your Dream Home?
Are you ready to work with a team of experienced real estate agents who have the knowledge and skills needed to negotiate a deal? Look no further!
Voortman Realty is a respected team of realtors who are ready and able to help you find your dream home. Whether you have a clear idea of what you’re looking for or need help landing on your must-haves.
Want to work with us? Contact us today to see how we can help you!