The real estate market is in a slump. There are great opportunities to save some cash by bidding down asking prices. Buyers offering much less than the asking price should make sure they understand what they are getting into.
Understand The Seller And Motivation To Sell
Attempt to find out why the house is being sold and use that knowledge to structure your offering price.
Is your local housing market weaker than the sluggish national one? Has the seller accepted a job in another city or already bought another home and is facing paying two mortgages? Is the seller facing bankruptcy or foreclosure? Any information you can obtain will strengthen your negotiating position.
Do Your Homework, Talk To Neighbors – Ask Questions
Ask your realtor the sale prices of comparable homes and how long certain listings have been on the market. If possible, get in touch with the seller directly to find out the seller's reasons for moving. Or, by speaking to neighbors around the home you're considering you can learn what life is like in the community and perhaps even pick up some insight into why the sellers are moving.
You can afford the purchase price but can you afford the monthly maintenance? Find out the monthly utility costs, property and school taxes, homeowners insurance, if wind or flood insurance is required, lawn maintenance costs, etc. Information is power.
Do Not Provide Too Much Information About Yourself
Find as much information on the seller, but divulge as little as possible about yourself. Any knowledge you provide could be used by the seller as leverage. You may be in a position to pay cash for the house, but the seller doesn't need to know that. If you are paying cash, the seller may hold firm to the asking price, because it means that you have the money and the seller wants it!
Make Sure You Have A Plan B – Options Reduce Your Stress
Before you begin negotiating on a specific property, make sure you have several other homes you'd be happy with. Never be desperate enough to buy any house so that you wind up giving in to whatever the seller wants. Either directly or through your agent let the seller know that theirs is not the only property you are considering.
Negotiations Are Better In Person
Try to arrange a meeting with the seller and both realtors. This can be an effective way to influence or persuade the seller into a “friendly” negotiation which could be more successful. In a face-to-face meeting you get your words, voice and body language into the equation.
If a face-to-face meeting is not possible, consider writing a letter to the seller expressing why you desire to purchase the house and what it would mean to you and your family. This is often a deciding factor if the seller has multiple offers. Buyers should be aware that their agent gets a bigger commission on a higher sale price and therefore may have less of an incentive to push for a lower price. However, the buyer should remind the agent, if necessary, that some commission is better than none!
Offer A Range Rather Than A Specific Price
When extending an initial offer, consider presenting a range of figures. An offer of a specific number that is considered too low may halt the negotiations altogether. A price range may afford you more flexibility and continued negotiations.
The goal of making an offer on a home is to purchase the home, not beat the seller. Remember, the home still belongs to the seller. Egos and emotions can cause buyers to get so enmeshed in the negotiation game that they lose the house because they didn't get the desired price. If the seller doesn't bring the price down as much as you had hoped, if you really like the house, the price has been reduced enough to fit your budget, and you've given the negotiation process your best shot, consider this a victory. Both the buyer and the seller win!
For Additional Home Buying Information Visit: Must Do's When Buying A Home.
