If you haven’t already heard, homebuyers are regaining some negotiating power in today’s market.

And while that doesn’t make this a buyer’s market, it does mean buyers may be able to ask for a little more. So, sellers need to be ready for that possibility and know what they’re willing to negotiate.

Whether you’re looking to buy or sell a house, here’s a quick rundown of potential negotiations that may pop up during your transaction. That way, you’re prepared no matter which side of the deal you’re on.

What Can You Negotiate?

Most things in a home purchase are on the negotiation table. Here’s a list of just a few of those options, according to Kiplinger and LendingTree:

Sale Price: The most obvious is the price of the home. And that lever is being pulled more often today. Buyers don’t want to overpay when affordability is already so tight. And sellers who aren’t realistic about their asking price may have to consider adjusting their price.

Home Repairs: Based on the inspection, a buyer is within their rights to ask the seller to make reasonable repairs. If the seller doesn’t want to do that, they could offer to reduce the home price or cover some closing costs, so the buyer has the money to take them on themselves.
Fixtures: Buyers can also ask for appliances or furniture to convey when the house changes hands. Having the seller throw in the washer and dryer cuts down on expenses the buyer would have when moving in. As the seller, you could leave your existing ones behind to sweeten the deal for your buyer, and get yourself new ones for your next place.
Closing Costs: Closing costs typically run about 2-5% of the home’s purchase price. Buyers can ask the seller to pay for some or all of these expenses to offset the cash the buyer has to bring to the table.
Home Warranties: Buyers can also ask the seller to pay for a home warranty. This is great for buyers worried about the maintenance costs that may pop up after taking possession of the home. And since this concession usually isn’t terribly expensive for the seller, it can be a good option for both parties.
Closing Date: Buyers can ask for a faster or extended closing window based on their own timetable. The seller can also advocate for what they need based on their move to find the right compromise.

One thing is true whether you’re a buyer or a seller, and that’s how much your agent can help you throughout the process. Your agent is your go-to for any back-and-forth. They’ll handle the conversations and advocate for your best interests along the way. As Bankrate says:

“Agents have expert negotiating skills. Without one, you must negotiate the terms of the contract on your own.”

They may also be able to uncover what the buyer or seller is looking for in their discussions with the other agent. And that insight can be really valuable at the negotiation table.

Bottom Line

Buyers are regaining a bit of negotiation power in today’s market. Buyers, knowing what levers you can pull will help you feel confident and empowered going into your purchase. Sellers, having a heads up of what they may ask for gives you the chance to think through what you’ll be willing to offer.

Want to chat more about what to expect and the options you have? Connect with a local real estate agent.

Read more at KeepingCurrentMatters.com

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Most house hunters hope to find that hidden gem: a great house listed at a low price.

While that occasionally happens, it is more common for buyers to try to create their own discount by making a lowball house offer. But that bargain-hunter’s strategy can backfire.

A lowball offer, or an offer price that’s significantly lower than the listing price, is often rejected by sellers who feel insulted by the buyers’ disregard for their property. Most listing agents try to get their sellers to at least enter negotiations with buyers, to counteroffer with a number a little closer to the list price.

However, if a seller is offended by a buyer or isn’t taking the buyer seriously, there’s not much you, or the real estate agent, can do.

Offering less on a house

However, as a buyer, you can take steps to increase the likelihood that your low offer will be accepted, or at least increase the chances that negotiations can take place.

Before you make an offer at all, you should be thoughtful about your goals. If you love the house and truly want to buy it, don’t submit an offer that’s too low. Be honest about what kind of mortgage you can afford and how much the house is worth. If you’re not sure, you can ask your real estate agent if the house is fairly priced, or if it would be reasonable to come in at a lower number. You can still offer the sellers a low price, but you don’t want to scare them away or give them an opportunity to accept an offer from another buyer.

However, if you’re interested in grabbing a bargain and becoming a homeowner for financial reasons (and are less invested in which house you own), a low offer could be the right option for you. Consider making an offer that hovers 25% below the asking price—and see what happens.

1. Stay updated on current market conditions

You and your real estate agent should be discussing the local real estate market throughout your house search so that you can recognize the value of individual homes. If your local market is a seller’s market with competition for homes, you are much less likely to have a lowball offer accepted than if buyers have the upper hand. However, in any kind of real estate market, a house that has been listed for sale for several months is more likely to have owners willing to negotiate a lower price.

It’s important to know the real estate market and do your research. A seller might be thrilled to get your low offer in one market, but might be more likely to go back and forth on price when more people are interested in home buying. You don’t want to be stuck making counteroffer after counteroffer when there are multiple people interested in the home. If you lowball the sellers, they might end up selling the house to other buyers and you’ll be looking elsewhere for your new home.

2. Be respectful of sellers

Even if you think the sellers have overpriced their property or have let it fall into disrepair, it is important to treat them with respect and follow the protocol of your local real estate market.

After all, this is the sellers’ home, perhaps the place where they have raised their family. They may be selling because circumstances are forcing them to sell, rather than by choice.

A low offer may be upsetting to the sellers, but if you and your real estate agent present the offer along with an expression of your appreciation for the property, it’s more likely to be accepted than a low offer accompanied by a half-complete contract or an insult about the property’s condition.

3. Have your agent contact the listing agent

To depersonalize the negotiations, it is best to have your real estate agent and the listing agent discuss your offer, but your agent can do more by talking to the listing agent even before you make an offer.

Your agent should also find out as much as possible about the sellers: why they are selling and whether they have turned down other offers. This can be helpful regardless of whether you intend to make a lowball offer or contemplate a higher offer.

4. Have your financing in order

Sellers are rightfully concerned about getting to the settlement of any offer they accept, so your offer should be accompanied by a pre-approval letter from a lender along with an earnest money deposit. The higher your deposit and your promised down payment, the more likely the sellers are to take your offer seriously. In fact, if you can make an all-cash offer, you are even more likely to succeed.

Keep this in mind: Having your finances in order also includes making the right decisions for yourself and your bank account. That is, make sure you can afford the mortgage for the house you like. If you think you could end up in trouble with your lender a few months or years down the road, take a step back. If you offered to waive the home inspection but are praying there are no issues with the house (because you know you can’t afford major repairs), maybe rethink this sale before going into escrow.

Yes, the seller may have multiple offers and you may end up back on the house hunting trail. But, it’s better to keep looking for a house you can afford than to default on your mortgage and end up in trouble with your lender.

5. Eliminate as many contingencies as possible

If you are making a lowball offer price for the home, you might consider keeping the contingencies to a minimum. With a steal of a price, you probably shouldn’t expect to have the sellers make repairs or to convey additional items to you, such as their window treatments. You should still have a home inspection, but you may want an information-only inspection if you anticipate making any repairs yourself.

If the sellers are already letting their house go for a bargain, you don’t want to complicate the sale with a bunch of contingencies. It’s important to find out what you should expect to repair, and the costs, but you should generally expect to get the house as is.

Keep in mind that a low offer is not always the right offer to make. In fact, you need to be prepared to lose the house if your offer is too low. Sometimes the market isn’t in your favor and the sellers will stand firm on the list price.

However, if you can make a low offer respectfully, in the context of your local market, you could end up with the bargain home of your dreams.

Helpful Negotiation Tactics for Today’s Housing Market

If you haven’t already heard, homebuyers are regaining some negotiating power in today’s market.

Mortgage Rates Plunge to Lowest Level in Over a Year Amid Recession Fears. Is Now a Good Time To Buy a House?

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