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Buyer Negotiating Tips
Some people are born negotiators.
They'd negotiate the time of day if they had the
opportunity. Many people, however, feel
uncomfortable negotiating. If you fall in the
second camp, think of a home purchase negotiation
as a dialogue between you and the seller. It's a
forum for exchanging ideas with one another to see
if you can come to mutually agreeable terms. If
you can: Great. You've bought a home. If you
can't: that's OK, too. You'll find yourself
another home and the seller will find another
buyer.
There are many ways to negotiate a home sale.
It's hard to generalize because each transaction
is unique. But, in most cases, a successful
negotiation involves give and take from both
parties. Keep in mind that you want the sellers to
feel good about selling their home to you. You may
need their cooperation during the transaction.
For example,
you may want to renegotiate the purchase contract
if your inspections reveal unanticipated defects.
You'll stand a better chance of successfully
working through these negotiations if you've built
good rapport with the sellers. A cooperative,
rather than adversarial, stance usually produces
good results.
FIRST-TIME TIP:
In the spirit of give and take, you may want to
plan your negotiation strategy so that you give up
something you want in exchange for the seller
giving you something you want.
For instance,
let's say you know that the sellers prefer a short
close, and you think his price is a little high.
You might start the negotiation offering a 60- or
90-day close and a price that's a bit below the
top price you'll pay. When the seller counters
back with a 30-day close, you can accept this if
the seller is willing to sell at your price.
With this
strategy, it's effective to save a bargaining
chip, or two, until a critical point in the
negotiation. That bargaining chip is often your
best price. You may be willing to pay the seller's
price if he agrees to take care of some deferred
maintenance. In this case, you would hold back on
agreeing to pay his price until the seller agreed
to make the necessary repairs.
Another
strategy that can break an impasse is the
"either/or" approach. With this strategy, you give
the sellers two options. They can take their pick.
Suppose
you're locked into a lease that runs 4 more
months, and costs you $2000 a month. You can't
afford to pay the seller's asking price and make
double monthly payments for mortgage and rent.
The seller
wants to close in 30 days; you prefer 90 or 120.
If the home is fairly listed for $300,000, you
might offer to pay $300,000 with a 120-day close,
or $294,000 with a 30-day close. The seller can
choose. By the way, it can further the
negotiations if the other party understands your
circumstances.
It helps to
plan out your negotiation strategy in advance.
Find out as much about the seller's situation as
you can. Determine the highest price you're
willing to pay. Make a pact with yourself to walk
away from the property if you have to
significantly overpay to get it.
Sometimes
it's best to stand firm during negotiations.
Perhaps you've negotiated to your best and final
price. You may want to lay your cards on the table
and let the other party know this. There's no rule
that says you must counter with a new price.
THE CLOSING:
And remember, all elements of the purchase
agreement are negotiable, not just the price. |
