Buyers Guide – Negotiation Tips to Get the Best Deal
When it comes to buying a home, your negotiation smarts can go a long way toward protecting your best interests and your cash. Here are 9 critical negotiation tips to help ensure you are getting the best deal:
Set your priorities early
Knowing whats really important early on is critical to getting a great deal. Ultimately, the bar for whether your negotiation is successful is determined by what the home and contract terms are wroth to you.
Know your local environment
The best negotiators are the most informed. To get the best deal when buying, ask your agents to provide data on these critical local factors:
- Recent sold prices for similar homes
- Average difference between asking and sold price
- Average days on market for similar properties
Get the inside scoop
Don’t make contact with the seller. Make sure you contact your agent to help you with all questions. Studies show that communication between a buyer and seller results in a more complicated closing process and fewer contracts that close.
Manage your own mindset
Remember, when negotiating, the least emotional parties usually have the most power. The more attached you are to a particular home, price point, or set of terms, the more likely you are to panic or cave in on important points, like price unnecessarily.
Lean on (and listen to) your agent for objective support throughout the transaction. It’s their job to help you ensure you are making the best business and life decision.
Learn ( and accept) the Negotiable’s
To manage stamina during the negotiation, find out early what is and isn’t within each party’s control.
Your agent can help you stay clear on this and avoid the emotional exhaustion that results from trying to haggle in areas that aren’t really negotiable (e.g. the bank’s bottom line, cosmetic repairs, etc.)
Minimize time pressures
When buying or selling a home, moving deadlines can cause you thousands of dollars and cause you to make needless compromises because your in a rush.
When buying or selling, here are a few ways to buy yourself some time:
- Plan and search when possible
- Locate temporary rentals
- Develop a plan-B for closing day in case you encounter last minute hurdles
Problem solve for all parties
Traditionally, negotiations were a two-way power struggle between buyer and seller.
Now, the buyers have to consider banks,appraisers, and some-times even property associations that all have their own guidelines and needs that impact the terms of the deal.
It’s more important than ever to approach your negotiation as an exercise in problem solving, with the aim of meeting the needs of as many parties as possible.
Bond with your bank
Too often transactions fall through at financing. Work in advance to make sure your deal doesn’t die at closing. For buyers this means working with your agent and mortgage broker to secure back-up financing in case things go awry with your fist loan.
Act quickly – not impulsively
When you find ” your ” place, make an offer. When you get a counteroffer or response, respond to it. In real estate, time is always of the essence, and prolonged hesitation often results in lost opportunities.
There’s nothing wrong with sleeping on a decision overnight, if the ” right ” move is unclear. But keep in mind, there are competing buyers and changing interest rates lurking, which can change the whole bargaining dynamic at any minute.
Buying a Home
The recent housing bubble sent the price and emaind for rentals soaring up. Along with low interest rates, new data shows owning a home can be less expensive than renting. It is more affordable to buy a house today than it has been in ages.
Three additional reasons to buy a home.
Equity: When you pay rent, you don’t own anything. When you pay a mortgage, you increase your degree of ownership in your home with every payment. Also, you can borrow against your ownership ( or equity ) in the home to pay for major purchases, or refinance your home at favorable rates, or once you’ve paid the entire mortgage off, borrow to fund major purchases like a second home or a child’s education.
Tax Deductions: You can deduct mortgage interest as well as your property taxes. Uncle Same doesnt give renters a bonus.
Creative Control: So, you like dozens of pictures on the wall? Hammer away – they are your walls now. Go ahead and paint them mango!
Finally, before you guy, get pre-approved for a loan. This should be done after you feel comfortable with the amount you’ve saved for a down payment and before you go house hunting. Getting pre-approved can help you feel comfortable with the price range you are shopping and negotiate for the best price.