Buying property is probably the biggest expense you will ever have, but owning a home gives you security, so it’s well worth it. When dealing with such a major decision, it’s important to review all options available, be thorough with your research and try to get the best possible deal. In order to get the greatest deal out there, you will need to learn how to negotiate a house price. We have prepared haggling tips you’ll want to write down and keep in your moving binder.
How to Negotiate House Price Without the Agent’s Help
If you’re considering buying equity, you will find yourself suddenly surrounded by people giving you unsolicited advice on how to negotiate the house price. In a sea of people who are all sharing their different opinions at once, you might find yourself to be a little lost.
Look at Other Options Before Closing a Deal
For starters, don’t be lazy, do your homework. Do thorough research on every housing option available. Just like when picking a long-distance moving company, you should follow the rule of looking at at least three different options before you decide on the right one. Don’t fall head over heels in love with the first house you see. Compose yourself, and look at a few other comparable options.
It will help you to negotiate a house price if you know the actual value of your potential future home. If you’re looking at a couple of homes, all about the same size, same neighborhood, but one is vastly more expensive than the other – it’s safe to say that it’s overpriced. Only by exploring other options will you be able to tell the true value of the place you want to purchase.
Check Out the Competition
A good life lesson that can be applied to this case is to keep your friends close and your enemy closer. It’s not in vain, as checking your competition out can give you valuable insight. First of all, if you notice a lot of people are interested in the same place as you are, it means that is a good option. It’s like not wanting to eat at an empty restaurant – we crave things in demand.
Unfortunately for you, the higher the demand, the higher the expense. If you’re on a budget, you will most likely lose in a bidding war against a person that can afford to spend more. A good piece of advice to remember when it comes to having competition is that a thoughtfully written buyer’s letter can go a long way and get you on the seller’s good side.
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How Do You Negotiate a Lower Price?
The first thing you need to remember when buying property is that no matter how strong and determined your seller seems, he’s flexible and willing to negotiate. Learning how to negotiate a house price down will have the biggest impact on reducing your costs when moving. On the other hand, cross-country moving companies might not be willing to go into negotiations because they all have a fixed moving company’s hourly rate. That’s why you need to learn how to haggle for a house. We are here to show you how to do it on your own, without the agent’s help.
Find Out the Backstory of the Sell
The key when negotiating house price is to find out who has the upper hand. If you have more power over someone, you can easily win the haggling war and get what you want. Power comes from knowledge, so try to find out as much as you can about the owners, their financial status, and the reason why they’re selling. Knowing the true motivation can give you an upper hand.
For example, the family selling is moving last-minute, and they need to sell fast. Or perhaps they have money troubles and need a cash flow asap. Enjoying someone else’s misfortune is not nice, but it will allow you to have the leverage to get a bigger discount. That leverage is tied to the closing date. If they’re in a hurry to sell, you’ll get a better deal. Also, if there is competition involved and you can offer the best closing date, consider it yours.
Keep an Eye on What the Real Estate Market’s Like
Also, keep an eye on what the real estate market’s like. A hot market might sound nice, but it isn’t ideal if you’re a buyer. Real estate agents always say that it’s a buyer’s market and that there are more houses that need to be sold than potential buyers. A seller’s market means the opposite – the ratio of houses to buyers is on the buyer’s side. In other words, if you want to make a purchase in a buyer’s market, you will have more wiggle room to haggle since agents are desperately trying to sell.
Get an Inspection of the Place
Instead of choosing to blindly believe anything the agent tells you, take matters into your own hands. Get an inspection to sweep the place from top to bottom. While it’s normal for the agents to do everything in their power to present the place in the best possible light, they don’t always show the negative sides. Hiring inspection can reveal true colors – they look for outdated and broken things you shouldn’t have to pay for. A thorough inspection will help you save money. Imagine spending your life’s savings on a place with a huge mortgage that has major flaws you didn’t know about and couldn’t see with the naked eye, like plumbing or cracks in the roof.
Negotiate Extra Terms and Closing Costs
Once you realize that, with the right technique, you can get anything you want out of the agent, you’re golden. If you thought the most you could do is to knock a couple of grand off the asking price, we’re here to tell you agents will do almost anything to keep you interested. Don’t settle for them giving you Christmas ornaments the previous residents left, ask for more. Remember, they want to make a sale more than you want to buy.
Fixing Any Damages or Repairs
Realtors should disclose any issues the property might have. If they don’t, you know better, and you have called your inspector to look for dirt. If he finds any problems a bit more serious than a broken lightbulb, it shouldn’t be up to you to pay for it. It would be like buying a car with flat tires. Use this as a negotiation term and lower the asking price or have them do the home repairs and set credit for repairs.
Start Decorating Early On
If there is any piece of furniture that has caught your eye, ask for it. In most cases, the humble abode you’re buying will be fully furnished and ready, and you won’t have to run to Ikea for furniture. Fully furnishing on top of mortgage and credit loans would be too much to handle. In other cases, former residents will want to take their belongings with them, or they already have, and the agent has set up staged furniture. If you notice something you think would go great in your new place, ask them to throw it in as a purchase gift. You can ask for anything from a lamp to a couch, it’s completely normal.
Make a Deal on the Closing Costs
When it comes to closing costs, don’t miss out on an opportunity to have all of them or a percentage of them paid. They usually run at about a couple percent (2-5%) of the selling price. Depending on the market, you can expect the seller to pay them fully or at least contribute. Try to throw in the cost of cleaning before moving in.
Don’t Be Shy, Negotiating Requires Confidence
If you want to haggle successfully, you need to stay determined. Sellers can see right through your act and when you are on the verge of settling. You need to develop a poker face and look confident. Our advice is to always think of the listing price as a suggestion rather than a rule. There’s always wiggle room, and unless there is major competition, no agent will let you walk away from a purchase. Keep in mind that they stand to lose more than you do. If you need some tips on how to appear more confident, watch this video.
What Is a Lowball Offer for a House? Don’t Make the Mistake of Overplaying Your Hand
With that being said, confidence is important, but at what point do you cross the line and become straight-up arrogant? What is the most you can negotiate when buying a house? We encourage you to be brave when haggling, but there is a fine line between getting a great deal and insulting the agent. On a really good day, the best deal you could get is to get a discount of 10% and include a home warranty. Anything above that would be overplaying your hand, and the sellers would reject you. On average, the standard discount is around 5% under the asking price, if not less.
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How to Negotiate House Price When Selling
The roles might be reversed, but the same strategies apply here as they do on how to negotiate buying a house, like:
- Play hardball, but don’t look desperate. Buyers can sense fear.
- Be determined. Reject a few offers, and hope you didn’t drive the potential buyers away.
- Always pay for closing costs. You can up the estimate by that same amount so you’re not losing money.
- Start bidding wars, find as many interested people as possible
- Set a credit for repairs
- Prepare your home for sale, and have it presentable and desirable. Getting packing service will leave less of a mess.
Consider Moving for Your Dream Home
If you don’t want to settle for moving to a smaller home and you can’t make an apartment feel like home, it might be time to move. Considering your moving budget says you can’t afford it, think about moving to a new city, where real estate, mortgages, and credit loans are more affordable. The next step for you is deciding where to live. Since you’re looking for more affordable options, moving to LA isn’t really the solution. After you decide, contact long-distance moving services, and start looking for house-hunting tips.
If you decide on moving cross country, you might end up moving to a warmer climate. If you embark on this journey, we recommend hiring a cross-country moving company. If you have cross-country moving services helping you, you’re more likely to avoid injury while moving. Another advantage of hiring cross-country movers or long-distance movers is that you will have more time to deal with selling without an agent.
Hiring a Real Estate Agent Could Help You
While admiring you for carrying the burden all by yourself, sometimes it’s smarter to hire a real estate agent to help you. Not only is it smarter, but it will also make your life easier, especially if you’re moving out for the first time and you have no idea what to do. They are trained professionals with years of experience who know the real estate market much better than you. They can guide you through buying or selling a house and give you pointers on how to get the best possible deal.
Don’t Lose Hope, Be Persistent and You’ll Get the Deal
Whether you’re buying or selling, rejections and counteroffers can get frustrating and stressful. Things get even worse as time goes on. You start to worry if you will ever find a good deal that benefits both parties. It might be difficult to land on a compromise since both parties want opposite things, but it will happen if you’re both realistic and professional.
