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5 Factors To Consider When Negotiating A Home Price

Buying a home means you might need to negotiate the price. Here's how to negotiate like a pro.

As you're buying a house, you have two challenges: 1.) get the home you want, even if there happen to be other bidders waiting in the wings; and 2.) get a price you can be happy with, including any needed repairs and other concessions.

Naturally, understanding where the seller is coming from will help. Some sellers are motivated to complete the transaction as quickly as possible. Others may be flush with offers or have time to burn. As the buyer, resist the urge to be intimidated. You hold plenty of cards!

Not all sellers price a home in a way that makes sense for their market — especially if they don't use the services of a reputable real estate agent. Other times, there might be complicating factors that change your perspective on what the home is worth. Standing your ground is best.

Keep these factors in mind as you're negotiating a price when buying a house:

The Outcome of Your Home Inspection
A home inspection report tells you essential facts about a home. The inspector's job is to give you a top-to-bottom assessment of the home's condition, which includes any repair work that needs to be done. You can negotiate for virtually any type of repair, but be especially wary of pest infestation, problems with sewer or septic, and anything to do with electrical systems.
Conveyances
A seller can offer you all kinds of perks to sweeten the deal. Often, these are provided in lieu of lowering the asking price. A conveyance is a transfer of ownership of things like furniture and other personal property in the home. If you are moving a long way, for example, you might find that relocating to a fully furnished home gives you great peace of mind.
Concessions
Concessions, on the other hand, are benefits and discounts that are usually rolled into closing costs as an agreement is finalized. A seller might offer you cash for moving expenses or new appliances, for example. The most common type of concession is money for repairs; however, don't be afraid to get creative with concessions in your negotiating strategy.
Current Market Conditions
Keep your eye on the market in every stage of your negotiation. Buyers usually devote a lot of thought to how market conditions affect their financing package, but that's not all to remember. Local real estate trends can mean the home will go up — or down — in value in the next few years. Ask your real estate agent if the seller's price is fair in light of your likely home equity.
The Home Appraisal
If there's one thing every buyer should know, it's this: Negotiate according to the appraised value of the home, not the list price. In most cases, your lender will look at the appraised value to ensure your financing package matches up with the amount you need to spend. If the seller's price is above market value, a little more time can turn the tides to your advantage.

Buying a house is a long and sometimes complex process. If you do not feel comfortable with the thought of having to negotiate, prepare in advance by partnering with a real estate agent you trust. He or she will support you with the skills and experience to handle negotiations.

Negotiating may seem stressful. It does, of course, add a little more uncertainty to the buying process. In the long run, though, it is the winning strategy for getting the best value possible. You may not be able to stop yourself from falling in love with a home, but you can save yourself some money!

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5 Factors To Consider When Negotiating A Home Price

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