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How To Negotiate With The Seller
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Buying a home is one of the most important purchases most people will make. In order
to make the right decisions the first time, potential buyers need to be prepared.
Consider the following before starting negotiations:
- Be prepared: Research the housing market in the target area. Once
you have information about the general area, focus on the particular property and
seller. Look for answers to questions such as:
- Why is the homeowner selling? (If they're moving because they find the area undesirable,
you might as well.)
- How long has the home been on the market? (If it has been on the market for a long
time, perhaps there are negative facts about the property that you need to know.)
- How much did the seller pay for the home compared to the current asking price? (If
the seller paid more, find out why. Was it a general real estate trend, or did property
values in that particular neighborhood go down?)
- What is the seller's time frame for selling and moving? Does it fit within your
needs?
- Are there any defects in the home or problems with the surrounding neighborhood?
(For example, is the roof so old that it will likely leak during the next storm?
Is there a new construction project in the area that will lead to major traffic
congestion?)
As the potential buyer, you want the advantage. While you want answers to all your
questions to the seller, reveal very little about your circumstances. Do not give
the seller personal information such as your income, the maximum you're able to
pay for a down payment or the home, or when you want to move. Make sure that your
agent knows not to reveal any such information to the seller or his/her agent.
Also, don't let the seller see how much you want the property. If you appear desperate
or overly enthusiastic, the seller then has the stronger bargaining position. When
meeting with the seller or listing agent, keep your emotions in check.
- Establish a Timeline: Find out if the seller needs to have the
sale closed sooner rather than later. If the seller is feeling pressured to sell,
use that to your advantage in negotiating. Even if you, the buyer, are the one with
the deadline for purchasing a home, don't let yourself be rushed into making concessions
or a purchase you may regret later.
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