Buying a house is the biggest financial decision you will ever make, and you want to make sure you get the best price. Here are some smart tips and tricks to help you feel more comfortable and confident at the bargaining table.
Get your finances in order. Your offer isn’t likely to resonate with a seller if it doesn’t already include a mortgage pre-approval. Some real estate agents won’t even show a property to buyers unless they have been pre-approved. Since the process can sometimes take months, it’s best to start early, so you will have all your ducks in a row.
Crunch the numbers. Before you get too hung up on minor pricing differences, make sure you have done the math. For example, at an interest rate of 4.3 percent, the difference between $199,000 and $195,000 is only $19 per month. While this can add up over time, it’s probably not worth losing your dream home.
Consider the home value. Instead of focusing on the list price, fixate on the property value. You can use recent sales in the neighborhood to support your position. If a property is priced below market value, don’t expect much wiggle room. If it is priced above market value, you have some room to maneuver.
Ask why the seller is moving. The more you know about the seller, the better you can tailor your offer. Does the person already have a new home? Is there a death or divorce involved? Might the seller still be looking for a new place? These are things that can help you determine whether the seller might prefer a quick or longer closing.
Research. Use online real estate listings and public records to find out as much as you can about the seller, home and neighborhood. You can leverage multiple sources to discover if the seller is in a divorce proceeding or if the home is in foreclosure. The more information you have, the more confident you will be.
Don’t worry about décor. When you are buying a home, you should focus more on structural elements than décor. It’s a lot harder to change these, compared to carpeting, countertops, appliances and window treatments. Let the little things go, and focus on what matters most.
Add an incentive. Most buyers think money is always the main factor for sellers; however, this isn’t always the case. If you know the seller would prefer to close quickly, you can offer to schedule a tight timeframe for inspections, along with the subsequent removal of contingencies. In some instances, this can prompt a seller to accept a lower offer.
Be responsive. It is crucial that you respond to counteroffers as fast as possible. Any delay will leave a window for other buyers to step in and create a bidding war. Delays will also make a seller feel like you may not be as interested as you seem. Prepare for any scenario, so you can quickly respond to any counteroffer with your own counteroffer that includes specific terms that won’t break the deal.
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