You’re Buying a Home! Here’s How to Negotiate Like a Pro
So, you’re ready to buy a home and you, of course, want it for the best price. If your offer is too low, the seller could pass on you for another buyer. Your real estate agent will be key in this discussion, getting you to a fair price.
The US real estate market has changed significantly since 2020. Home prices have skyrocketed, home sales have slowed down, and mortgage rates have increased. This has made it more challenging for buyers to purchase a home. However, there are still opportunities for buyers who are willing to be flexible and patient.
No real estate agent? Choose wisely.
Let’s say you find a home and decide to work with the real estate agent who listed it. That’s great—they know the property and it will make it much easier, right? Nope. That listing agent works for the seller and has their best interests in mind. While some real estate agents can play both sides of the fence, helping sellers and buyers, it’s not in your best interests to do this. Hire a real estate agent who is dedicated to you and your home buying goals exclusively. Do your research and make sure you ask lots of questions.
Research the local market
Even though you have a real estate agent, you’ll want to make sure you know what the local real estate market looks like so you can make a reasonable offer. Your real estate agent will perform a fair market analysis to see if the asking price is reasonable for the area. This could give you room to negotiate.
Lots of buyers. Not so many homes. This is where the competition gets tough. Buyers have to compete with other offers and may end up paying more for their home. Embrace has a solution to this—Approved to Move™. Get a full approval BEFORE you find your home. Go in looking like a cash buyer because you know you’re already approved. Real estate agents and buyers love this. Click here for more information on Approved to Move™.
Why are they selling? How long have they lived there? How long has the house been on the market? Has there been a price change? By doing a little research, you can gain some helpful insight to give you better bargaining power.
Settle on your price range
Work with your lender and real estate agent on a realistic price range. Your real estate agent can begin the negotiating at the lower end of your range and slowly build up as needed. Setting a range helps you get prepared emotionally to start the negotiations.
Include non-price perks
There are other incentives that may appeal to the seller: Cash offers, non-contingent offers, flexible settlement dates, and pre-approval letters help greatly. Once again, here’s where Approved to Move™ comes in. Any lender can give you a pre-approval letter. Embrace gives you the full approval. You’re steps ahead of other buyers.
No ego, please!
This is an emotional process for sure. You need to make sure that both you and the seller are happy with the terms. This is not a one-sided transaction and it’s not all about you. Do your research, prepare and negotiate a deal that’s fair to everyone involved.
Things to keep in mind about the current real estate market
- The market is still favoring sellers. With low inventory and high demand, sellers have the upper hand in negotiations. Buyers may need to offer above asking price and waive contingencies in order to have their offer accepted.
- First-time homebuyers are struggling. Rising home prices and interest rates have made it more difficult for first-time homebuyers to afford a home. However, there are government programs and assistance programs available to help first-time homebuyers.
- Investors are playing a role in the market. Investors are buying up more homes, which is contributing to the low inventory and rising home prices.
If you’re thinking about buying a home in 2023, it’s important to be prepared for a competitive market. Work with a qualified real estate agent and get pre-approved for a mortgage before you start shopping for homes.