5 Tips for Home Buyers When Negotiating

Don’t wait to counter-offer

Responding to counter-offers is important. This is an opportunity for you to either make or break the purchase of a home. And, I’m assuming if you have made an offer on a home you really want it. By not jumping on the counter-offer you are allowing other buyers the opportunity to sneak in with a better offer, or any offer at all that the current home owner is willing to take.

You should also consider your counter-offer carefully before making it. Willing you be willing to go higher if certain criteria is met, such as repairs, or inspections. Having a contingency plan based on expected offers from the seller is good to have in your back pocket so you can respond quickly with an offer you are comfortable with.

Talk to your agent

You should always remember your real estate agent when you are making an offer. Whether you have bought one home, or multiple, it is likely your agent has been through this process many times more than you and can make good recommendations on what they think the house will sell for as well as reasonable contingencies.

In addition, your agent can approach the seller with any questions you have before making an offer, or in regards to a counter offer.

Try to get the scoop on the seller

While not always possible, you may be able to find out information on the seller that is useful in making your offer. The situation of a seller can work to your favor. For example, if a seller is motivated to sell because he or she has been transferred to another city for work. Or, perhaps the house has been on the market for several months and the seller has already purchased a new home. Both of these situations may suggest that the offer can lean in your favor. That is if you are the only offer on the table.

The same goes the other way. If the seller is contemplating renting out their home if they don’t get the offer they want. Perhaps, the home is a hot commodity, or only been on the market a short period of time. Maybe the seller simply isn’t in a hurry to move until they receive the offer they are looking for. Any of these circumstances may put the negotiation on the seller’s terms. However, you may be able to find better footing by leveraging a little compromise.

Review what you can afford

For many buyers who have been looking at homes at several hundred thousand dollars, it can be easy to think that upping your offer by $10,000 or $20,000 isn’t that big of a deal. Yet, be careful. It is always a good idea to run the numbers through your mortgage professional. Sometimes a higher offer may not affect your monthly payments, but you may also be surprised at how much the interest, taxes, and insurance can tack on.

When you talk to your mortgage professional, it is a good idea to have them run your monthly payments through several price offers, so you know what to expect, if you have to make a decision between a higher counter-offer and a lower one. 

Consider writing a personal letter to the seller

Don’t ever underestimate the power of the pen. You need to remember that to most people their home is an extension of who they are. People want to know their home will be left with another good family, and people who will care for what is essentially part of their self.

By writing a letter to the seller on why you want the home, noting specific features, and how much it will mean to you and your family to have the home you may just give yourself an edge. When you provide a personal letter, possibly even photos of your family (and don’t forget the dog) you are putting a face to a name, and taking yourself outside the bounds of simply being another number.