Updated: Jul 6
Whether you are buying or selling a home you can negotiate the price. Of course, a buyer is going to want to negotiate a lower price, while the seller will try to negotiate for a higher price. When negotiating, it is important to remember that each party is looking out for their best interest. Buyers can negotiate by getting a home inspection and having their finances in order. Sellers can negotiate by creating a bidding war and by offering to pay closing costs.
1. Buyer negotiation tactic: Get an inspection
If you are going to negotiate a home price, then you may want to get a home inspection. Now, some lenders will require you to get an inspection, but even if yours does not it is still in your best interest to get one. A home inspection allows you to know everything wrong with the house. Of course, that is a negative way of putting it, but the seller may not be able or willing to disclose everything wrong with the house. You can use the inspection to negotiate in a few different ways. You could ask the sellers to lower the price in order for you to cover the necessary repairs, or you could ask the sellers to pay for the repairs.
2. Buyer negotiation tactic: Have your finances in order
If you want to have any clout with a seller, then have your finances in order. The second buyer negotiation tactic is making sure you are preapproved, or if you are paying cash, that you have proof of funds. Many sellers and real estate agents won’t even see you without a preapproval letter. If you want to have any chance of negotiating, make sure your finances are in order! The sellers do not want to waste their time negotiating with someone who cannot afford to buy their house. So, as soon as you’re ready to start looking for a house go to your lender and get that preapproval letter!
3. Seller negotiation tactic: Create a bidding war
Buyers are not the only ones who can negotiate the selling price of a house. As a seller, you also have the ability to negotiate for a higher selling price. One way you can do this is by trying to create a bidding war. Schedule an open house after listing your home. Some potential buyers may make you offers. Have your top bidders right down their best and highest offers. You will then pick the offer. It is important to remember that you cannot accept an offer if you are in negotiations with a different buyer. This is unethical.
4. Seller negotiation tactic: Offer to pay closing costs
You might be wondering “How is offering to pay closing costs a negotiation tactic?”. Closing costs typically cost around 3%. Since a buyer is paying a large chunk of money for your home, they will expect you to cover the closing costs. Of course, the price of the closing cost can eat into a lot of your profits. So if you offer to pay for the closing costs, you can often negotiate a higher price to cover those costs.