When selling or purchasing a home, your focus is on getting it at a fair price. But as a buyer, you’re probably trying to get the best deal possible. If you’re a seller, you’d rather keep the high price. Because of the competition between sellers and buyers, every purchase you make must be negotiated, regardless of the type of transaction, or you will not get the best deal. Though you have a realtor to assist you in the transaction process, here are five tips to consider when negotiating the price of a home.
1. Market Understanding
You must know whether you are in the buyer’s or seller’s market. When you negotiate the price of a property in a buyer’s market, there are more houses for sale than buyers. In such scenarios, the buyer has more power to accept the list price and negotiate, since there are other homes to select. On the other side, a seller’s market can put the seller in a power position as there are fewer homes than buyers. Therefore, the buyers compete against each other. Consequently, the seller negotiates aggressively, as the buyers prefer to make an offer on their property. Real estate markets can be regional, so what is true in Victoria may not be accurate in other cities like Toronto or Edmonton.
2. Understand Your Opponent
For sales, you must know the person who stands on the other side of the transaction. You must understand their motivations, which helps you throughout the negotiation process and gives you additional leverage if they are motivated. Likewise, when the other party faces unique challenges with their living situation, you should be able to tailor your best offer. For instance, a buyer who hasn’t sold their home can benefit from an extended closing period. Plus, they get time to fulfil the requirements. Besides learning about the other party, you must research the property you intend to buy. Public records are the source of information based on the land you prefer to purchase. Sellers benefit from knowing the information available on their property.
3. Negotiate Creatively
Negotiating the price of a home isn’t always about the price. Use terms like the time granted for inspections, the time involved in closing, and conditional clauses such as financing, inspection, and so on.
4. Negotiate With Your Realtor
It will be tempting to cut out the middleman and negotiate the home’s price directly with the other party but think again. Consider negotiating exclusively with the support of your agent. Dealing with a third party can be beneficial because it prevents personalization.
5. Compromise Or Move On
You won’t get what you want; that would be the case with home buying. Be ready to negotiate and compromise. Thereby, both parties’ needs are heard. When you work with an agent, ensure you stay on the same page about deal breakers and expectations.