Keep your emotions in check and your eyes on the goal, and you’ll pay less when purchasing a home.
Buying a home can be emotional, but negotiating
the price shouldn’t be. The key to saving money when purchasing a home
is sticking to a plan during the turbulence of high-stakes negotiations.
A real estate agent who represents you can guide you and offer you
advice, but you are the one who must make the final decision during each
round of offers and counter offers.
Here are six tips for negotiating the best price on a home.
1. Get prequalified for a mortgage
Getting prequalified for a mortgage proves to sellers that you’re
serious about buying and capable of affording their home. That will push
you to the head of the pack when sellers choose among offers; they’ll
go with buyers who are a sure financial bet, not those whose financing
2. Ask questions
Ask your agent for information to help you understand the sellers’
financial position and motivation. Are they facing foreclosure or a
short sale? Have they already purchased a home or relocated, which may
make them eager to accept a lower price to avoid paying two mortgages?
Has the home been on the market for a long time, or was it just listed?
Have there been other offers? If so, why did they fall through? The more
signs that sellers are eager to sell, the lower your offer can
3. Work back from a final price to determine your initial offer
Know in advance the most you’re willing to pay, and with your agent
work back from that number to determine your initial offer, which can
set the tone for the entire negotiation. A too-low bid may offend
sellers emotionally invested in the sales price; a too-high bid may lead
you to spend more than necessary to close the sale.
your agent to evaluate the sellers’ motivation and comparable home sales
to arrive at an initial offer that engages the sellers yet keeps money
in your wallet.
4. Avoid contingencies
Sellers favor offers that leave little to chance. Keep your bid free
of complicated contingencies, such as making the purchase conditional on
the sale of your current home. Do keep contingencies for mortgage
approval, home inspection, and environmental checks typical in your
area, like radon.
5. Remain unemotional
Buying a home is a business transaction, and treating it that way
helps you save money. Consider any movement by the sellers, however
slight, a sign of interest, and keep negotiating.
Each time you
make a concession, ask for one in return. If the sellers ask you to
boost your price, ask them to contribute to closing costs or pay for a
home warranty. If sellers won’t budge, make it clear you’re willing to
walk away; they may get nervous and accept your offer.
6. Don’t let competition change your plan
Great homes and those competitively priced can draw multiple offers
in any market. Don’t let competition propel you to go beyond your
predetermined price or agree to concessions—such as waiving an
inspection—that aren’t in your best interest.
More from HouseLogic
Determine how much mortgage you can afford
Keep your home purchase on track
Plan for a stress-free home closing
G.M. Filisko is an attorney and award-winning writer who has to
remind herself to remain unemotional during negotiations. A frequent
contributor to many national publications including Bankrate.com,
REALTOR® Magazine, and the American Bar Association Journal, she
specializes in real estate, business, personal finance, and legal
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