Sharpening Your Home Buying Negotiation Skills
Here are four common negotiation misconceptions about buying a home, along with some helpful tips to protect your bank account.
When it comes to negotiating, if you’re new to the home buying process, you may not be as good at it as you need to be and that could end up costing you big-time, quite literally—when you finally do sign on the dotted line.
Take a look at the following negotiating misconceptions, and if your thought process tends to run along these lines, you may need to hone your skills in the home buying arena before starting the process.
Negotiating misconception #1: Jump right in and start looking at homes!
The adage “patience is a virtue” definitely applies when it comes to buying a home. Most of the negotiating process is about preparation and gathering information. For instance, you want to know what the asking price is for homes in the community and what their being sold for. You also want to find out the value of certain features such as fireplaces, views and other amenities, along with neighborhood schools, if applicable. Also, don’t fall for staging; be sure to look behind the bling.
You should quiz yourself, too, by asking what your deal-breakers and must-haves are in a home. You also want to figure out a spending limit that’s within your comfort zone.
Do all of this before meeting with a real estate agent. Two of home buyers’ biggest mistakes is talking with a friendly real estate agent too early and being way too open for their own good.
Negotiating misconception #2: Your real estate agent is your buddy, so go ahead and tell him or her what you can spend.
Never forget that your agent is ultimately there to sell homes. When it’s time to meet with one, don’t tip your hand. In other words, don’t divulge your comfortable spending limit or your upper spending limit, either.
However, you do need to give some indication of the price range that interests you, so it’s good to go with a figure that’s 5 to 10 percent below your comfortable spending limit, knowing that you can always increase it if you find an exceptional home.
Negotiating misconception #3: When you see a home that you like, express interest.
Usually that’s not the best idea. You don’t want to tell the seller’s agent or the seller how you feel when you’re walking through the home because emotion tips them off that you’re excited, which can play in their favor. That doesn’t mean you have to be insulting, in fact, being too critical of a home can hurt your chances if the seller takes offense. So you don’t want to be rude yet too effusive either.
Asking questions is fine though and is actually a very important part of the process. You can ask the five, same questions of any home that you look at:
- How long has the owner/s lived there?
- What repairs have been done to the property?
- Why is the owner selling?
- What’s the asking price?
- How soon does the seller wish to close?
Negotiating misconception #4: A home is a home; it doesn’t matter who’s selling.
Who’s selling a home and why, can matter enormously in a negotiation. Do the owners need money fast or are they getting divorced? Has the owner just passed away and do their children want to sell the home quickly?
Also learn as much as you can about the owner. It’s a good idea to talk to neighbors about the community anyway and while you’re doing that, you can always throw in a polite question or two about the owner.
Final negotiating tip: If you’re fairly confident of your abilities, deal directly with the seller’s agent, instead of going through a buyer’s agent. One of the advantages of dealing with a seller’s agent is that the person may disclose more information than he or she should. You may be able to glean invaluable information this way which could ultimately help in negotiating a lower price.
So consider yourself a lean, mean negotiating machine to home sellers and venture forth holding your cards close and your wallets closer!