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Luis Alvarez/Getty Images October 28, 2022 Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Bankrate logo The Bankrate promise
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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Prior to negotiating
One critical strategy for success is working with a knowledgeable . Find someone you can work with comfortably, who knows the ins and outs of your local market. Having a professional expert in your corner can be helpful throughout the entire homebuying experience: Your agent will know what homes in the area have been selling for, understand the legal paperwork you’ll need to deal with and serve as a buffer between you and the property seller. Home prices have been , though mortgage rates continue to rise. With these changes in the market, buyers may have more room to finesse their offers, says Nicole Carrel, a Realtor with Modern Abode in Oklahoma City. In many places, she says, the market has shifted in buyers’ favor, with listed homes no longer receiving multiple offers right away, as they were in the hot of the last 18 months or so.
Negotiating home price
Deciding how much to offer on a house is something you should closely collaborate on with your agent. Local agents are experts in the local market — they will know whether a home’s is reasonable for the area, and what kind of offer is most likely to be seriously considered by a seller. They also know what may or may not be realistic given current market conditions, says Carrel. “Our job as real estate professionals is to act in the best interest of the client,” she says. “You never know the circumstances under which a seller is operating.” If the seller is in some kind of distress — mid-divorce or under threat of foreclosure, for example — they may be willing to meet you at a lower price point; if they have listed just because sales in the neighborhood are strong, they may not budge on their listing. An agent will help you navigate the nuances. Buyers are now assessing their negotiations with a more critical eye, says Carrel, especially as top 7 percent nationally. With that in mind, you’ll have to decide whether you’re willing to entertain a possible from the buyer or stand firm on your original number. You might also consider building an into your offer, so that if another buyer offers more you have a structure in place for how high you’re willing to go. Negotiating based on inspection results
A home inspection is one of the most crucial aspects of home price negotiations. (Although, in a super-competitive situation, some buyers are willing to waive the inspection to make their offer more appealing.) A professional inspector will look over the property with a fine-tooth comb, checking the condition of major systems, like plumbing and electrical, as well as the roof, windows, foundation and more. If your shows a need for serious repairs, you can typically use that to your advantage in negotiations. Your agent can ask the seller to take care of the repair work before closing, or negotiate a lower price to cover the cost of the work that needs to be done. Some online companies, like Repair Pricer, will translate your inspection report into an itemized list of cost estimates for just this purpose. Negotiating for things other than price
Do you love the porch furniture that was on display during the showing? Would you be willing to pay extra to make sure that dining-room chandelier ? Personal property can be worked into your real estate negotiation, but Carrel advises that buyers must “keep in mind that an appraiser can’t see that on a contract.” In other words, the home must stand by itself as being worth the sum you’re asking to finance, so don’t offer so much that the . A light fixture isn’t worth risking your financing over. Negotiation points may also include less tangible things, like the timeline to close, the move-in date or the division of payments.
How much can you negotiate
It’s hard to know how much wiggle room you may have when it comes to negotiations. The amount can vary greatly depending on local market conditions and the seller’s circumstances. If you’re trying to negotiate in a hyper-competitive area where listings are garnering multiple offers each day, you’ll want to understand what you stand to gain — and what you could stand to lose. Your agent will be in contact with the seller’s agent to find out more about the seller’s needs. Keep in mind that your will likely include lots of details, clauses and concessions, and it’s OK to spell out certain things in writing. A porch swing is one example: It is attached to the house, so presumably it will stay there. But if it’s important to you, you can stipulate in the contract that it must stay put. Knowing when to walk away
There is such a thing as over-negotiating, however. If you find yourself returning to the negotiation table again and again, Carrel advises you to step back to reassess the situation. “Don’t lose sight of what is really important to you,” she says. Try your best to avoid emotionality during the transaction. If you’re in love with a house that desperately needs a new roof but don’t have the budget to replace it, be realistic, and don’t let your emotions cloud your financial reality. It’s OK to consider walking away, says Carrel. Just make sure you have the proper protections written into your contract, so that if it comes down to it you can legally.
The closing
Once negotiations are complete, you finally come to the finish line: the . This is the final step of the purchase process, when legal documents are signed and the title and keys to the house are transferred to the property’s new owner — you. This usually falls approximately 50 to 60 days from the date your offer is accepted, depending on what kind of financing you have secured and how long negotiations have taken. Your agent will help guide you through the process. And when it’s all over? Congratulations, you’re a homeowner.
FAQs
Can you negotiate on asking price when buying a home
Yes, price negotiations are common. Your wiggle room here will depend on several factors, including local market conditions and the seller’s personal circumstances. In a seller’s market, like we’ve had the past couple years, there is typically not much room for buyers to negotiate on asking price, but in recent months, market shifts have created less buyer demand, and thus more room to negotiate on price.
What seller concessions should I ask for when negotiating
As mortgage rates continue to climb, making homes more difficult to afford, buyers may ask for more concessions from a home seller. typically come in the form of help with closing costs. For example, if is necessary in order to close the deal, the buyer might ask for the seller to help with this expense. Other common concessions include the cost of repairs revealed in the inspection report, real estate commissions and miscellaneous fees. The seller is not required to agree to these requests, but doing so often helps to close the sale.
What is considered a lowball offer
Realtor.com loosely describes a as anything “significantly lower than the asking price.” Making a deliberately low offer may snag you a bargain price, but it is equally likely to offend the seller or be ignored altogether, so be careful. It’s best to work in collaboration with an experienced agent when deciding how much to offer on a home.
Can I offer less if I m buying the house with cash
“Cash is always king,” Carrel says. When a buyer makes a on a home, there is no need to line up financing, so the closing can happen much more quickly. Additionally, a buyer paying cash is a sure-thing sale, with less that can go wrong along the way. Depending on the seller’s situation, you may succeed with an offer that’s lower than others on the table if you can back it up with cash. SHARE: Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Related Articles