Buying and selling a home is a big deal. It significantly affects your finances, where you live, your options for friends and activities, and your children’s education. With so much at stake, you want to walk away happy with the deal. A “deal” consists of many aspects, but unless it’s a seller’s market, it rarely consists of handing over the stated asking price and half of closing costs on the date of the seller’s choosing. It also doesn’t necessarily mean you offer the seller less money, they accept or reject your offer, and it’s a done deal.
There is much more to the art of negotiation. An experienced real estate agent is a master of the art, making them an important tool during the negotiation process. Your agent knows when to push and when to accept a deal. And of course, a good agent knows what is negotiable—everything from price, closing costs, and closing and move-in dates to repairs and even furniture and appliances.
Negotiate closing costs
Many first time home buyers don’t realize they are expected to pay half of closing costs, which are fees ranging from 2% to 5% of a home’s sale price. Remember, money saved in closing costs is worth the same amount as money saved on the price of a home—money is money, yes? Asking the buyer to deduct your closing costs from the price of the home is a common negotiation point.
Depending on your time frame, flexibility on the closing date, which is usually between 30 and 90 days after signing a contract, can be useful in negotiations, as can the date you take possession of the property. Depending on their circumstances, some sellers need to remain in the home until after the closing date and will ask the buyer to rent the property to them for a period of time.
Then there are contingencies the buyer includes in an offer. When both sides agree (after negotiating) they become part of the contract. Sellers know that the more contingencies, the higher the chance of a sale falling through. Some things should never be agreed to, such as waiving the inspection, but a shorter inspection period is an acceptable option if leverage is needed.
Negotiate repairs and warranties
It’s easier and faster for a seller to offer the buyer a credit for repairs and updates than to hire a professional. For example, if carpet needs replacing, a credit means the buyer won’t pay for the work, but will get to choose which carpet they want—win-win. While we’re talking about repairs, the home warranty premium is another cost buyers can ask sellers to cover (at least the first year’s premium).
It may seem odd, but furniture and appliances can also be up for negotiation. Maybe you love the huge mirror the seller has over the fireplace in the living room, or the house has a nice stainless, already installed refrigerator you covet. The seller may be firm on the price, but willing to throw in the wood rocking chairs on the porch.
Negotiation is one of the most important parts of the home buying process. So be sure your agent understands what is important to you, devise a plan, and watch your agent work their magic. And one final piece of advice that will ensure your negotiating success: always be able to walk away. There will be another house that you will love just as much as this one.