So you’ve found your dream home. In this hot seller’s market, you will likely need to be strategic about putting in an offer. Many homes are selling quickly and above asking price, so you’ll need to negotiate a price that’s fair and also attractive to the sellers.
Keep reading for your guide to negotiating pricing so your dream house becomes your reality house.
Negotiating Pricing: 5 Tips To Get The House
One of the first steps to negotiating a purchase price for a house is to assemble the right team. Find a broker you trust and who knows the market and find a real estate lawyer who will look out for your interests.
Once you have your team assembled, think about these things as you make your offer.
Be Realistic With Your Offer
Don’t completely low-ball the seller but then again, don’t offer a price so high that the home will never appraise for that. If you are getting a mortgage, the bank will only give you a loan for what the home appraises for. What this means is that if you offer above asking and the appraisal comes in low, you’ll be responsible for making up the difference.
Be Prepared To Move Fast
In a seller’s market, properties go quickly once they hit the market. If your particular real estate market is extremely competitive, your first offer should be your best offer.
You should assume that there are other offers out there, so present your best offer right off the bat. It’s a big decision to make quickly, so be sure you know what you want and if you are buying with a partner, make sure you are both on the same page with what you want and what you will compromise on in a home.
Know Your Price Ceiling
Although you need to move fast and make your best offer, don’t get carried away. Know what your price ceiling is and if you hit it, be prepared to walk away from the home. Set your absolute maximum budget ahead of time and know when it’s time to throw in the towel.
You don’t want to find yourself in a situation of being house poor because you bought more house than you can afford.
Think Beyond Price
If the market in your area is hot and houses routinely have multiple offers, often above asking price, you might need to get creative. Instead of just focusing on the price and what purchase price you can offer, think outside the box. Maybe you can offer a higher deposit of earnest money rather than the standard amount. This shows the sellers that you are committed to the home.
You could guarantee a quick closing, especially if the seller needs to sell and move quickly. You could also offer to forego inspections. Be careful with this one though, and only do this if your broker thinks its safe to do so.
Add a Personal Touch
When a seller is presented with multiple different offers, they see price and terms, not the people making the offers. If you offer a personal touch, such as a letter or picture of your family, the sellers might feel a connection to you and choose your offer, even if it’s not the highest.
Tell them why you love the house and why you want it. Convince them that you should be the ones to live in their home.
The Bottom Line
Buying a home is an exercise in patience and stamina, especially in a seller’s marketing. Use these tools for negotiating pricing and rest assured that you will end up with the house you are meant to have.
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