Wouldn’t it be nice if we could call up William Shatner and have him get us the exact deal we want on the home of our dreams? Unfortunately there’s not an instantaneous online negotiating service available. Just old school tactics and negotiations… With the strong seller’s market we’re currently in, it’s more important than ever to have a good strategy when buying a home.
Knowledge equals power
Do your homework and be prepared to share it logically and matter-of-factly. Your Realtor® should complete a comparative market analysis to see exactly what similar homes are selling for in similar or the same neighborhood. Know the percentage of asking price they are selling for and the median price per square foot. I believe this is the single most important thing you can do. It’s hard to argue against statistical evidence.
Be prepared to walk
This strategy can be risky but can get you a better deal. If you can keep emotion out of the equation and be able to walk away, you put yourself in a winning situation. If you are more desperate than the other party, you lose a bit if leverage. There’s power even in the appearance of walking away. Having a backup plan is always smart too.
Split the difference
If both parties have come to a halt and no one wants to budge, try meeting in the middle. If you’re not too far off, it’s usually the best way to get the deal done.
Other than price
Besides focusing only on price, try negotiating closing costs, home warranty, and/or repairs.
You can always go up but not down
Let’s say you offer your highest and best offer of $280,000 on a $300,000 home. If the seller counters at $290,000, there’s nowhere to go after that. You’ll want to leave yourself some room to come up if needed. Each party will usually go back and forth a couple times each before reaching an agreement.
Contingencies & Pre-approval
With the current sellers market we’re in, most sellers will not want to negotiate with contracts complicated by too many contingencies. Keep it clean and simple for a more attractive offer. I would also recommend being pre-approved and having that letter available to go along with your offer. That lets the seller know you are serious and are ready to buy.
Call me when you’re ready to move and I’ll be your William Shatner!