The Money section of U.S. News & World Report magazine is always a good place for consumers to find smart-shopping tips, whether the product is toasters, furniture or homes. In a recent piece about negotiating to buy a home, U.S. News explained the many ways that prospective home buyers can deal with a seller.
Granted, a few of the suggestions are pretty intuitive negotiating skills. Anyone who has ever haggled at an open-air shop in Mexico or Europe knows about compromising and making counter-offers. But several of the ideas that the magazine’s experts came up with are unique to home buying, and aren’t so obvious. Let’s take a look at some of the most useful tips from the article:
- Assess your financial health before shopping for a home: Gather credit reports, budgets and recent tax statements. Know where you stand, financially, and how much you can afford.
- Don’t become overly focused on price: Remember that the mortgage interest rate is just one of many factors, besides the selling price, that will affect your monetary future.
- When you make an offer, base it on value, not the list price: Here is where a knowledgeable agent can save you thousands of dollars. List price is an arbitrary number. Recent nearby sales are a better measure of what you should be paying. Caution: if the list price is considerably below market, you won’t be able to negotiate much lower in most cases.
- If you identify a home you want, be ready to do the deal quickly: You’re not the only one interested in that “perfect” house, so if you decide the property is the one you want, be ready to make an offer and do the deal.
- Don’t be reluctant to ask for repairs: Be reasonable, but do not be afraid to ask the seller to make necessary repairs, or at least to lower the price by the estimated cost of the work that needs to be done. The worst that can happen is the seller will say, ‘no.’ But, you won’t get anything unless you ask.
- Try to learn why the seller is selling: This is just smart business sense. How motivated is the seller? Are they needing to sell quickly for personal reasons, or has the house been listed for months and they are just waiting for the right price? All this information helps you position yourself and make the right offer.
- Dig deeper with Internet research: Find out about the neighborhood, local schools, recent sales, and anything else of relevance to your personal interests.
- Don’t sweat the small stuff: If you love the house, don’t worry so much about décor and appliances. You can change things like that after you move in. Yes, small items can be very important, but don’t let changeable, relatively inexpensive items become deal-breakers.
- Be ready to compromise. Rule number one in life: You don’t always get what you want. Home sales are a two-way street of negotiation between buyers and sellers. Allow for at least a bit of wiggle room on price and other factors. If your attitude is “all or nothing,” you’ll likely end up with nothing.
Buying a home is a financial, as well as an emotional, transaction. You’re not buying some impersonal object that will be consumed and forgotten, like a frozen pizza or a DVD of the latest mystery film. The old saying, “Home is where the heart is,” rings very true even in today’s technological age. So make sure you learn how to make your best deal by following some, or all, of the negotiating techniques mentioned above. Good luck!