The Art of Negotiating Price of a House
We’ve read a million blogs before about how to find a property that fits with your personal requests and needs. But what happens when it comes to actually making a bid for a new home? Is there a skill involved, or do you just go big or go (back to your old) home?
The truth is there is an art to negotiating the price of a house. There is a way to deal with sellers, using information about the current market and the property while understanding the value of the compromise so that you can use it to your advantage.
We take a look at each of these tips to help you through the deal-making process of your home purchase.
Four Tips To Buying A New Home
1) Understand The Current Market Situation
Forget the negotiation process for a second and think about the type of market you’re heading into as a buyer. If it’s a buyer’s market, you might find yourself with a plethora of options available that you can use to your advantage to negotiate. If it’s a seller’s market, you might find yourself competing against other buyers. You want the former, not the latter, in this case.
With a buyer’s market, you have more power to offer under the price you want to pay, ask the seller to cover the selling costs and attend to any other financial or property enquiries. It further enhances the point: you have to make sure what market you’re getting into before considering negotiation tactics.
How do you know what kind of real estate market you’re in? Please speak to your local real estate agent (https://cbcamrosehomes.ca/) and see what the Canadian Real Estate Association (CREA) and the Canadian Mortgage and Housing Corporation (CMHC) say in their mortgage reviews.
2) Research The Seller & The Property
The more information you have on the property you’re interested in, the more you can use it to your advantage.
For example, if the house has been for sale for months and has reduced its asking price, you can seize the opportunity and make a move for it. Ask why there’s been a lack of interest and if there is anything particularly wrong with the property. You could perhaps offer a lower price as they are keen to move on. You should also know the closing time-frame in which they want the house sold. A shorter period (15 to 30 days) means they want it purchased from them fast.
You should also research the history of the property and the area. Have there been recent developments in the area? Has the property been sold before, and for how much? You can gain this information through public records and online real estate listings.
With this information in hand, you can use it to put together a better strategy for negotiating the price of the home.
3) Stand Your Ground For Your Essentials
There are some essentials that you should never give up regardless.
Take, for example, if you want to buy a condo. You want to make sure the condo board has enough reserves in its funds to cover any major updates or renovations. The same goes with the property management company running the condo: are they delivering a quality service, or are there stacks of complaints about them?
If you’ve made these essentials (the condo board is well stocked and the property management company is competent), then don’t back down on them during your search and negotiations. Whether for a condo or house, you have a list of things that you want. You shouldn’t waver too much from them.
It might make you seem like a rude and tough person, but you need some guarantees that the new house you’re buying is up to standard. It also means that the seller might be more reluctant to buy into your wishes, or be more flexible with other parts of the deal if they know that you aren’t willing to budge on specific things.
4. Expect To Compromise
You can’t always get what you want, but you can get it pretty close. Try to enter any negotiation process with the idea that compromise is part of the deal. Sure, you have your essentials, but you have to be willing to understand the seller’s point of view too.
More so, alongside the initial cost of the property, you can negotiate for other things, such as the time frame allowed for inspections, if any repairs would be covered by the seller or if they will credit you at closing for the work you have to do and the length of time to close.
If you’ve done your research right (understanding the current market conditions and knowing your history about the property), coupled with these targeted areas, you can reach a deal to buy a new house for a price that works for you!