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Buyer Negotiating Tips
Some people are born negotiators.
They'd negotiate the time of day if they had the opportunity. Many
people, however, feel uncomfortable negotiating. If you fall in the
second camp, think of a home purchase negotiation as a dialogue
between you and the seller. It's a forum for exchanging ideas with
one another to see if you can come to mutually agreeable terms. If
you can: Great. You've bought a home. If you can't: that's OK, too.
You'll find yourself another home and the seller will find another
buyer.
There are many ways to negotiate a home sale.
It's hard to generalize because each transaction is unique. But, in
most cases, a successful negotiation involves give and take from
both parties. Keep in mind that you want the sellers to feel good
about selling their home to you. You may need their cooperation
during the transaction.
For
example, you may want to renegotiate the purchase contract if your
inspections reveal unanticipated defects. You'll stand a better
chance of successfully working through these negotiations if you've
built good rapport with the sellers. A cooperative, rather than
adversarial, stance usually produces good results.
FIRST-TIME TIP:
In
the spirit of give and take, you may want to plan your negotiation
strategy so that you give up something you want in exchange for the
seller giving you something you want.
For
instance, let's say you know that the sellers prefer a short close,
and you think his price is a little high. You might start the
negotiation offering a 60- or 90-day close and a price that's a bit
below the top price you'll pay. When the seller counters back with a
30-day close, you can accept this if the seller is willing to sell
at your price.
With this strategy, it's effective to save a bargaining chip, or
two, until a critical point in the negotiation. That bargaining chip
is often your best price. You may be willing to pay the seller's
price if he agrees to take care of some deferred maintenance. In
this case, you would hold back on agreeing to pay his price until
the seller agreed to make the necessary repairs.
Another strategy that can break an impasse is the "either/or"
approach. With this strategy, you give the sellers two options. They
can take their pick.
Suppose you're locked into a lease that runs 4 more months, and
costs you $2000 a month. You can't afford to pay the seller's asking
price and make double monthly payments for mortgage and rent.
The
seller wants to close in 30 days; you prefer 90 or 120. If the home
is fairly listed for $300,000, you might offer to pay $300,000 with
a 120-day close, or $294,000 with a 30-day close. The seller can
choose. By the way, it can further the negotiations if the other
party understands your circumstances.
It
helps to plan out your negotiation strategy in advance. Find out as
much about the seller's situation as you can. Determine the highest
price you're willing to pay. Make a pact with yourself to walk away
from the property if you have to significantly overpay to get it.
Sometimes it's best to stand firm during negotiations. Perhaps
you've negotiated to your best and final price. You may want to lay
your cards on the table and let the other party know this. There's
no rule that says you must counter with a new price.
THE CLOSING:
And
remember, all elements of the purchase agreement are negotiable, not
just the price.
Article written by Dian
Hymer
Dian Hymer is author of
"House Hunting, The Take-Along Workbook for Home Buyers," and
"Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
Distributed by Inman
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