Purchasing a home requires a lot of communication between the seller, buyer, realtor, etc. And when it comes to negotiating on the home, the price is only a small piece of the puzzle. Educating yourself on various negotiation points in the buying price can not only provide you peace of mind, but produce the outcome you deserve!
Here are our top negotiation points to discuss when it comes to buying a home:
It goes without saying that a listing price isn’t an accurate representation of what the house is worth, or what the seller knows they’ll get. It’s a flex point, knowing that the buyer is going to negotiate. For buyers, it’s about snagging the best deal and for sellers, it is not. This is the framework for why many deals fall through. Sellers need to hit a certain number to make profit off the home, especially if it’s financed and isn’t paid in full. This means if they’re negotiated at a price point at any less than their remaining balance is, they’re the ones who pay the difference. Buyers have more flexibility in this case, because the price can be distributed over the length of their mortgage. If you’re considering negotiating on price, learn more about specific strategies for doing so on our blog.
Buyers tend to assume that including fewer contingencies in an offer will be more appealing to the seller. This is because fewer contingencies means fewer chances for the deal to go poorly. However both the buyer and seller must agree on each contingency laid out and if there are any unresolved contingencies, both parties have the option to get out of the contract and walk away. Because this is a concern for sellers, buyers have a bit more power to be flexible with contingencies. We always recommend consulting with someone on what contingencies you can afford, and how to go about the process in the smoothest way possible.
A typical closing schedule falls somewhere between 30-90 days. However certain factors (like a high number of contingencies) can lengthen this process, or an all cash offer may shorten it. A closing schedule becomes important if you’re on a time crunch and have a definitive time frame for moving. If you do have flexibility on your moving schedule, be sure to let the seller know. The sellers are more willing to accommodate you under the agreement of full transparency.
If you’re unfamiliar with closing costs, these costs are any fees that took place during the transaction. They usually amount to 1-2% of the total sale, and are split between buyer and seller. This way, a buyer pays their dues but can also use it as leverage for another negotiation point. You can also discuss seller concessions — an instance where the buyers asks the seller to cover their half in an effort to deduct that cost from the sales price. This can help lessen the buyer’s out of pocket costs and decrease the amount to finance.
We hope you feel empowered to use these negotiation points in your next move! If you need help navigating these uncharted waters, Ken Venick can help. Visit our services page for more info, and contact us today.