When you have found a home that meets your wants and needs, and you’ve decided on a price you want to offer, let the negotiations begin! When you and your agent prepare the offer, it’s important to understand what aspects are flexible so that you can compose a financial offer and a timeline that is best for you.
Obviously, the price is negotiable. As you strategize about the number you want to lead with, be sure to consider the following:
If the home you want is attractive, well-priced, new to market and likely to sell overnight, don’t waste time haggling; on the other hand, if the market is sluggish and the owner needs to sell quickly, a little negotiating may be the best thing for you.
Time is negotiable. If you need a quick closing or need more time than the average buyer, timelines may need to flex. Most importantly, make sure the time tables leave you room to get and consider thorough inspections so that you know what, exactly, you are buying into.
Confidence is a negotiable asset. If you are concerned about the home’s systems or appliances, you can ask for a warranty; this will protect you from unplanned expenses if something breaks within an agreed upon window of time after closing. Bear in mind, the seller may already have taken this into consideration by lowering the listing price, and may not be willing to absorb the cost of a warranty as well.
There may be a win/win to be had in negotiating for amenities rather than money; a seller may need the cash proceeds of the sale more than a piece of furniture, appliances, theater/sound equipment, window treatments, outdoor equipment, etc. If they won’t flex on the price, perhaps you can negotiate for something the seller has that you would otherwise need to buy.
Repairs for issues found during inspection are also negotiable, although important structural issues are much more compelling than aesthetic ones. For the buyer, a structural issue will need to be resolved regardless of who buys the house, whereas the next buyer may overlook a cracked window pane or a leaky sink. You may choose to ask that the seller fix the issue, or you may prefer to arrange a concession (a reduction in the price) at the time of closing to cover the cost of getting the work done yourself. Again, the decision rests equally on both sides – in the case of such findings, both the buyer and the seller have the option to walk away from the contract.
Closing costs can also be negotiable. When you need to be mindful of cash outlays that you will make at closing, it can be more advantageous to pay the asking price and ask, instead, for the seller to pay your closing costs. So long as the seller nets out where they want to be, they probably won’t mind paying closing costs rather than reducing the selling price.
During negotiation, it is important to know your limits – financial and emotional – and to anticipate the seller’s limits as well. It is possible to lose a deal entirely by trying to save just a few more dollars. Your agent can help you assess the situation long the way. Put an expiration date on your offer(s); if your offer is not accepted, be prepared to come back with a counter, or walk away, making the choice based on sound financial decisions. Most importantly, though, be reasonable and respectful, and maintain perspective. Offers and demands that reflect unrealistic expectations or which fail to respect the real value of the property or the needs of the seller can quickly end a negotiation that might otherwise have earned you a home that would have been just right for you.