What to Know Before You Negotiate
While buying or selling a home presents many challenges, the negotiation phase is among the most difficult to prepare for. Each side has its own priorities, and coming to an agreement can be a stressful journey.
However, a full understanding of the process, and careful consideration of the options at hand can make it simpler and faster to get a deal done.
For sellers, the best strategy to avoid a challenging negotiation is to ensure the home is priced appropriately initially. Work closely with your Realtor to identify the area’s recent home sales that best indicate your home’s market value. A thorough, objective approach will put you in a position to evaluate and respond to offers effectively.
Preliminary research is just as important for buyers. Studying the relevant comparable sales will allow you to make a fair offer upfront, cutting down the time it takes to agree or move on. Offering significantly less than you know the house is worth is likely to lead to delays rather than savings, or worse, offend the seller and end negotiations before they even start.
Concessions and Repairs
While it may be the most significant, price is not the only negotiating topic worth discussing. Closing costs, a home warranty and even appliances can become a part of the discussion. Asking sellers to include big-ticket items that aren’t typically part of the sale, such as the refrigerator or washer and dryer, can provide savings for buyers that isn’t dependent on a price reduction. For buyers with limited cash resources, supplementing their closing costs can be more important than minimizing the sales price, so don’t be afraid to consider creative ways to close the gap.
In addition, any repairs that need to be made can be an opportunity for further negotiation. In most cases, an inspection is done shortly after the initial acceptance of an offer. While major issues are best to take care of before closing on the home, minor repairs could be remedied by a reduction in price, placing the responsibility for the fix on the new owner. It can also lead to a quicker closing, which can be mutually beneficial.
In fact, timing can bring substantial leverage to the negotiation of a home sale. In cases where one party is interested in limiting or lengthening the time before transferring ownership of the home, a new avenue of possibilities is opened.
Working with an experienced lender and completing as much of the preliminary process as possible beforehand could make a faster-than-average closing reasonable, creating a more attractive offer. On the other hand, sellers hoping to streamline the transition to their next home may find an option for a delayed closing or short-term lease-back of the property worth a discount on the sales price. The more flexibility you can offer with the timing of the sale, the better your chances of negotiating a deal you can appreciate.
For a straightforward discussion of the best lending options for you, speak with a loan origination specialist from Open Mortgage today. Find out more at OpenMortgage.com.