Blog » Home Buyers: How to Negotiate Like a Pro
Home Buyers: How to Negotiate Like a Pro
Whether you’re a first time homebuyer, or it’s been a while since you’ve been in the market, it’s important to know your price range, and to understand how to negotiate with sellers so that you can secure the home you want within your budget.
Research comparable properties in the area
A comparable property may be one that is similar in size and condition, in a similar neighbourhood, or the same neighbourhood. Make sure to look at prices of recently sold homes, homes that are currently in escrow, homes that are currently on the market, and homes that were recently on the market, but didn’t sell.
If you find that comparable homes are priced lower than the home you’re considering, or if you find that a similarly priced home didn’t sell or has been on the market for a long time, you may be able to negotiate a lower price. Your real estate agent will have an idea of the local prices, but you will be a more informed buyer if you can do a little bit of research yourself too.
Your initial offer is a learning opportunity
You can always offer less than the asking price just to test how the seller will react. Sellers don’t usually expect bids to be at asking price from the get go, but it’s important not to go too low, especially if you’re competing with other buyers. If you really do want the home you have to let the seller know you are serious without bidding higher than necessary. Use other details to entice the seller to take your lower offer, such as giving them the exact closing date they are looking for, offering them details about your loan to ease their mind about your financing, or shortening the inspection period to move the process along.
If you choose to work with a real estate agent, he or she can help you choose an appropriate initial offer. When you’re negotiating, try not to get emotionally attached to the property, or picture your loved ones in the house; it may cause you to lose ground in your negotiations.
Have the home appraised and inspected
It is critical to have a pre-purchase building inspection, which could potentially uncover issues with the house that can help you negotiate a better price. An appraiser can value the home after an inspection and let you know what the home is worth - and whether the seller is asking a fair price.
Usually, once the home is under contract, the buyer has a specific time frame in which they can request an inspection. Not only can an inspection help you negotiate a lower price, but it is necessary after the purchase of any building to ensure that it is up to code, and safe for use.
A pre-purchase home inspection can identify problems like mould, broken pipes, a rotting roof, asbestos or other issues the house may have. In some cases, these issues may need to be repaired in order to meet city codes. Common issues that may arise during a pre-purchase home inspection can include:
- Plumbing Systems
- Electrical Systems
- Doors & Windows
- Roofs, Gutters & Downpipes
- Patios, Decks & Outdoor Extras
- Heating and/or Air Conditioning Systems
Essentially, the cost of some repairs may be tacked on to the cost of the house, and it is the buyers responsibility to bring up these costs to the seller. It is possible that the seller will lower their asking price to make up for the cost of the repairs rather than fixing the repairs prior to the sale.