Negotiation is an art form. This is a fact that becomes increasingly more evident when a homebuyer and seller are working to reach an agreement in a real estate transaction. While there’s never a blanket negotiation strategy that fits every situation, there are some fairly prevalent mistakes that can absolutely kill a deal. Let’s look at a few of the most common negotiation mistakes people make when trying to buy a home.
Ignoring Your Realtor’s Advice
When you’re in the process of buying a home, the most valuable tool you have at your disposal is your Realtor®. Real estate agents are trained in the art of negotiation and have experience with lots of different scenarios. Put your trust in your agent to guide you through the negotiation process, and take the advice they give you to heart. He or she has pledged to make your best interest their priority.
Overlooking How Long the House Has Been on the Market
Before you make an offer on a home, pay attention to the number of days it has been on the market. If it’s been on the market for less than a few weeks to a month, you’ll want to come in with a strong offer. If it’s been 90 days or more, the owner is probably more than ready to make a deal.
Disclosing the Actual Amount You Can Afford
Never disclose to the seller how much you can actually afford to spend on the home if it’s more than your offer. This means that the pre-approval letter you present to the seller should be tailored for the amount you’re offering for the specific property. Most lenders will be happy to issue a new pre-approval letter for each new offer or counteroffer.
Assuming Everything on the Property Conveys
You know what they say about assuming, right? The old saying definitely applies here. Never assume that everything you see in a house when you tour it will come with the home when you buy it. For example, certain light fixtures, window treatments, and appliances might be considered personal property, and the seller may intend to take them when they move out. It’s not uncommon to see language like, “Refrigerator and dining room chandelier convey” in a purchase agreement. To be safe, you should spell out a request to keep anything that might not be considered a permanent fixture of the property.
Focusing Too Much on Sales Price
Instead of focusing on the total price, look at how much you’ll be spending monthly. Some buyers get that “sticker price” stuck in their head and can’t move forward without seeing it blinking at them like a neon sign. But statistics say that you won’t stay in the home you’re currently buying for the full thirty (or even fifteen!) years of your mortgage. Work with your lender to determine a good monthly payment that fits your budget; then you’ll have a total sale price to shoot for. If it’s still a little high for your liking, use negotiation tactics to bring it down in your favor. For instance, you might ask the seller to pay your closing costs.
Not Being Personal Enough
Sometimes a personal touch will help give you the edge over other prospective buyers. Consider including a buyer’s letter of introduction when you submit your offer. If another buyer presents a similar offer at the same time, there’s a chance your letter will spark a connection with the seller, which means they might choose your offer over the other one.
Making a Lowball Offer
You might think that if you make a low enough offer, the seller will get tired of going back and forth and settle for a lower price. But it almost never works that way. In fact, if your offer is low enough, the seller will probably just reject your offer without even countering. There’s nothing wrong with offering a lower amount than asking price, but it shouldn’t be less than 95 percent of that price unless the property has a lot of issues. Again, rely on your real estate agent’s knowledge and advice here. They should show you a comparative market analysis that will give you a good idea of the house’s actual value.