Most of the country is in a seller’s real estate market now, which means demand is higher than supply and home prices are on the rise.
Competition for housing is getting fierce and buyers are finding themselves bidding against other buyers, but all is not lost for buyers.
Savvy home buyers still have leverage to negotiate successfully even in a seller’s market. Here are a few tips for today’s buyers to successfully negotiate their home purchase.
1. Understanding and acceptance. The number one tactic how a savvy home buyer can negotiate successfully in a seller’s market is understanding the market conditions and accepting them. A buyer who has this real-time understanding of the market will succeed.
It is the buyer who is still stuck in the past who continues to lose out on house after house, or who stubbornly sticks to their outdated beliefs that the seller should accept their low-ball offer, pay their closing costs, repaint the house in their favorite color, pay a full year of homeowner’s dues and throw in the John Deere for free. Today’s buyer is not the seller’s savior.
2. Use your low interest rate to your full advantage. Today’s buyers are already ahead and saving money with the low, low interest rates available. Buyers shouldn’t discount the money they are already saving. Buyers of new construction can leverage their low interest rate even more by rolling the cost of upgrades into their mortgage. (The fence you would have put on your credit card has a higher interest rate than your mortgage.) Existing homeowners may choose to refinance their current mortgage and either take that equity to buy another home, or get a home equity loan to buy another home.
3. Pay cash and close fast. Most sellers would see tangible financial benefits of working with a buyer who can pay cash and close quickly, and may be open to negotiate on price and other terms. Buyers who can close quickly have the upper hand to negotiate and win out against competing offers.
4. How to get the listing agent to work for you – get fully approved by a reputable, local lender. A listing agent can better support your offer if you are working with a local, reputable lender who is known to get the job done. Everyone wants to be assured the transaction won’t fail due to poor lending practices, and using a reputable lender will make your offer stronger. But don’t stop there – complete your loan application and send in your W-2s and bank statements. Telling your loan originator your income and debt isn’t getting approved for a loan.
5. Keep it clean. Discuss with your Realtor about your contingencies and your options. A book-long offer filled with a hundred different ways the buyer can back out of the deal can be a big turn-off for a seller. Pick and choose your contingencies carefully and have the full understanding of how that impacts you.
6. Get your own Realtor. This should go without saying but hire your own Realtor to represent you.
See more articles in my Home Buying Guide:
Must-Have Online Research Tools Every Buyer Needs
The 8 Most Important People You Need to Know in Real Estate
10 Critical Questions to ask your Realtor
6 Tips when Purchasing a Home
Top 10 Reasons to Buy a Home
Financing and the Costs to Buy a Home
10 Commandments when Applying for your Loan