Negotiating the best possible price for the home you want to buy is crucial for your finances, both now and over the long term. This is because buying a home is such a big financial commitment. In this article, we provide some practical tips to help you negotiate the best possible price for the home you want.
Research the market
Do your research, look at past sale prices and inspect as many homes as you can before you make an offer (or ideally before you even start house hunting!). This research will give you an idea of the real value of comparable homes in the area. You can then use this knowledge to bargain with the real estate agent.
Find out the reason for selling
If you can find out the reason the seller has their home on the market, you might be able to use this to your advantage. For example, if the seller has already bought another property they might need to move out quickly and therefore be prepared to accept a lower price. In addition, knowing how long a home has been on the market is potentially important information. The longer the time period, the more receptive a seller might be to a lower price. Talk to the real estate agent and find out.
Start low and don’t go above your limit
Have your loan pre-approved so you know the maximum price you can pay before you start negotiating. Then make sure your first offer is below that figure. This allows you to progressively increase your offer up to your limit during the negotiation process. If the seller accepts your lower offer, you won’t need to borrow as much to buy the home.
Starting low and not going above your limit is especially important during an auction bidding process, where you can often be tempted to make rash decisions in the heat of the moment.
Don’t get emotional
Treat the negotiation process as a business transaction. Stick to the facts and negotiate rationally. Even though it’s an important life decision, try not to get emotional about it, especially in an auction environment.
Create a win/win situation
Negotiation is a two-way street requiring both parties to give and take. Try to create a win/win situation by offering a benefit to the seller in return for accepting your lower price. For example; having your finance pre-approved or not having the purchase subject to you selling your home. This provides them the opportunity to finalise and settle the sale quickly.
Present your offer confidently to the real estate agent or seller, and be prepared to outline practical reasons for your offer, if necessary. For example, you might have had a building inspection done that indicates costly future repair work will need to be done. Even if the seller doesn’t accept your lower offer, you might be able to negotiate for them to do that repair work as a condition of the sale. That will save you money in the long run.
As you can see, there are a number of tactics you can use to negotiate the best possible price for your home. It’s well worth doing for the sake of your financial future. And it’s just as important to get the best home loan to suit your needs.
While we can’t negotiate buying your house for you, Tomorrow Finance can help you find the right home loan.
To speak with our experts, phone 1300 754 562 or contact us online. There’s no obligation and our service is 100% free!Back « 6 Reasons You Could Get Turned Down for a Mortgage.
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