Overview
Buying a home is often the most important purchases most people will make in their lifetime. In order to make the right decision the first time, potential buyers need to be prepared. Consider the following before starting negotiations now that your offer has been submitted:
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 want to consider this issue.)
- How long has the home been on the market?
- If the home has been on the market for a while, what could be the key driver?
- How much did the seller pay for the home compared to the current asking price?
- What is the seller’s time frame for selling and moving? Does it fit within your needs?
- Are there any issues with the home or problems with the surrounding neighborhood? example, is the roof so old that it will likely leak during the next storm?
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 are able to pay for a down payment or the home, or when you want to move. This information is confidential and should not be disclosed to the listing agent or seller. Also, do not let the seller see how much you want the property by appearing desperate or very enthusiastic.. This will give the seller a step up compared to you in the negotiation.
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. At the same time, if you are flexible in the closing date, use this to your advantage to make your offer stand-out from the seller. Both parties need to agree to a timeline and need to evaluate some creative ways to come to a middle ground, if not then move on to the next possible home that meets your needs.