Knowing one or two negotiating tips can be very beneficial in the negotiating process when purchasing a new home. Most home buyers know we are in a down market and many home purchasers think you can purchase a home for pennies on the dollar in a down market. Occasionally you can but it’s not always the case.
You have to know how the house is priced. If a home is priced at $300,000 a major percentage of home buyers immediately want to offer $250,000 for the home. You have ask yourself, what is the home worth? How long has it been on the market. Who owns it? How much do they owe?
You need your realtor to complete a comparative market analysis on the home. There are most likely lots of other home buyers in your price range looking in the same area. Let’s say the CMA returns and shows that the house is underpriced and you see a lot of Realtors cards in the home. There could be people circling around the home to put in an offer. Have your agent call the listing agent to work out if there are any offers before submitting your offer. If there are, then you may have to put in an offer at full price with an escalation clause.
If the CMA shows the home to be priced at around about market price then you can generally start your offer about 10% under without upsetting the sellers. If you go much lower sellers have a tendency to get irritated and it turns more into a who’s likely to win game rather than being about buying or selling a new home. If a consumer puts an offer in on a $300,000 home for $200,000 the seller would most likely counter higher towards the $300,000 or not answer back to the offer in any way. If you offered 10% less at $270,000 the seller might meet halfway at $285,000. This makes a contribution to a discount of 5%. Believe it or not homes in the Seattle real-estate market area are selling for roughly 0-5% off of list price.
If you are dealing with a seller that just will not move on price and the home has been on the marketplace for a bit then patience is the key. If the seller truly wishes to sell the home and no purchasers come along then there will ultimately be a price drop. Make sure you track this home weekly for price drops. I’ve seen this occur numerous times where you’ve a stubborn seller or a misinformed listing agent that believes they will get a certain price and they do not accept or counter back an offer. Months later the home ends up selling for a little less than they may have got.
If you are negotiating a short sale it is crucial to remember the seller and the listing agent most likely set the price but they are not the ones taking the loss on the loan. The bank is the one taking the loss and they make the decision on how much the home will sell for. If the list price on a short sale is $300,000 and it seems like a good deal and you put in an offer for $300,000 and the seller signs off on it, try hard not to get to excited. Months after you get your offer back from the seller, the bank or lien holder will send out their own reviewers and if the home values for $400,000 then they are going to counter you back at around $400,000. It can be very frustrating to wait months just to have the bank come back and ask for extra money. You also need to be sure you don’t deposit any earnest money and have all of your timelines start on the day the bank accepts your offer in writing.
If you are negotiating on a bank owned home foreclosure the banks can answer back reasonably quickly. All banks are different but a good rule of thumb is they will give you about 3% off of list price. If they do not accept your first offer just have patience because they’re going to sell the home and they usually do price reductions about every 30 days or so. Make sure you follow up and track any bank owned homes that you like weekly.
If you’re in the marketplace for a home in the Puget Sound area then try out Seattle Real-estate Listings to search for Seattle homes for sale. Find unique properties like Lofts for sale,Waterfront Properties and more. You can also search surrounding areas like Sammamish WA property or Bellevue.