With the current lack of homes for sales we are amid a very strong Sellers’ Market. A Seller’s Market is one where the demand from buyers exceeds the supply of homes for sale on the market. Pricing tends to be higher and is more attractive for sellers, leaving homebuyers in a very competitive market. As a buyer it is important you know the best ways to negotiate so you can help and not hurt your home search. Ralph DiBugnara has three tips to that will help you get the best deal.
- What is the property worth?
Make sure before you put in an offer you have your realtor pull similar comparable properties to ensure what the value is. You can also do some research on your own through Realtor.com or Zillow. Both sites have a recent sales section that you can search a zip code or town. It will give you a list of all the properties that just sold and tell you the date the transaction closed, the final cost, the square footage of the property, and all the specific details on the property that were publicly listed. Important things to look for when searching for comparable properties would be the number of bedrooms, bathrooms, the square footage, if the basement is finished if there is one at all, and the garage situation.
- As much as you like a home, you need to set a budget and stick to it.
Don’t overpay out of emotion for a property you do not own yet. Get preapproved and the decide what you are comfortable paying monthly. Buying a home is a serious financial undertaking and while most people take obvious costs such as mortgage payments, taxes, and insurance into consideration, some expenses are less obvious. To make sure you are prepared for any and all surprises, watch our quick budgeting tip video.
- Once your offer is accepted you will have two more opportunities to negotiate.
A property inspection and appraisal report will both need to be completed. The inspection tells you if there any repairs needed, and the appraisal will give the definitive value. Depending on what they say you may have some room to negotiate price. Most of the time the listing agent will accompany you, your agent, and the home inspector on inspection day. Make sure you have your poker face on and do not seem overly comfortable or uncomfortable during the inspection as the listing agent will relay anything that happens over to the seller and can take away negotiating power in later discussions.
Looking for more first time homebuyer videos and articles? Check out our From Novice to in the Know – Tips for First Time Homebuyers video.