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5 Real Estate Negotiating Tips for Buyers

Posted at 06/03/2019 01:33 PM by Pat O'Connor

Making an offer on a home and getting under contract is one of the last, but probably the most important, steps in home buying. Having a knowledgeable real estate broker by your side is critical in knowing the true value of a home and what should be included in the contract. Many times, the buyer and seller will go back and forth not only on price but on other aspects of the potential sale. Below are some line items that can be negotiated by a realtor on behalf of their client during the home buying process:

Price

Just like any high priced commodity, the listing price of a home isn’t always the "real" price. Negotiation is expected in any real estate transaction. In a hot market, it may represent the point where bidding begins. In other scenarios, the price tag may be reduced significantly. It’s important to know the neighborhood and have access to the most up-to-date comparable sales of similar type properties. This is where a knowledgeable realtor proves his or her worth and determines whether a home sells quickly or languishes on the market for months. Having timely market data to back up a solid offer is the first step to landing your dream home.

Terms

Unless you have a cash offer, acquiring a loan to buy a home is the most critical piece on the contract. Outlining the finance terms and whether the contract is contingent on financing should be included in the offer. It is beneficial to get pre-approved for a mortgage and know ahead of time what kind of interest rate you’ll need. It may behoove you to lock in at specific rate especially if a rate hike is anticipated. A .25 % interest hike can mean hundreds of dollars extra in your monthly payment. If you haven’t done so already, start getting a feel for what the market is doing and where it might be when you make the offer. Any reputable loan officer should be willing to sit down with you and explain the ins and outs of your loan and how the interest rate might vary.

Dates

Knowing how much time you’ll need to close is important, both for the buyer and the seller. Typically, a closing takes 35-45 days -- not a long period of time! Unless your are purchasing a home with cash, the buyer’s lender (i.e. loan approval) dictates the length of time it will take to close. As a result, it’s imperative to have your loan pre-approved before getting too deep into the process. Once the clock starts ticking (upon a signed contract), you’ll have to be dealing with earnest money, home inspection, an appraisal, finding homeowner’s insurance and an array of other details. It’s vital to look at the big picture and have a detailed list of what needs to be accomplished when and that is where an experienced real estate broker is worth her/his weight in gold.

Inclusions/Exclusions

Inclusions is one of the items that gets lost when negotiating. Just because the MLS says they are excluded or are not included, doesn't mean they can't be. Bottom line - it never hurts to ask! Typically, all major kitchen appliances (refrigerator, stove, dishwasher, trash compactor) are included but it won’t hurt to ask about the microwave, small convection oven, washer/dryer and any other items in the home, for that matter. Many homeowners might not want to mess with moving large pieces of furniture or appliances, especially if they are downsizing. For first time home buyers, it’s a great opportunity to have furnishings already in place. This alleviates the seller from having to conduct a yard sale and it’s also a convenient negotiating tool. When previewing homes, keep a list of items in the home that appeal to you and might be bartering tools for you. Also, your broker should be up-to-speed on what current contracts are including and excluding.

Contingencies

Contingencies in a contract are essentially a list of conditions or actions that must be met before a contract becomes binding. These conditions can be wide-ranging and are enacted for both the protection of the buyer and the seller. Regardless of what is included in the contingency section of the contract, it should be spelled out very clearly leaving no room for vagaries. Some examples of what would be included in the contingency sections are:

  • Amount of earnest money required as a deposit on the home (typically 1 % of the purchase price)
  • Time allotted to inspect the home
  • If your present home needs to sell prior to purchasing a new home
  • Agreement on the home appraisal.

Your Usaj Realty broker will know exactly how to write you the best offer possible. They will communicate effectively and professionally with the listing agent in order to strengthen your offer. Contact us today to learn how Usaj Realty can assist you in finding the home of your dreams.

(Editor's note: This article was originally published in July, 2017. It has been updated and refreshed to reflect current trends and market data).

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Posted by Pat O'Connor

Pat O’Connor has dual citizenship in both Wisconsin and Colorado, having been born and raised in Wisconsin Dells, but later adopted by the Centennial State. A graduate of the University of Colorado (B.S. Journalism, 1980), O’Connor began her career as a sportswriter at the Boulder Daily Camera under the tutelage of the venerable Dan Creedon. Her experience also includes stints in public relations at Aspen Highlands Ski Area, the Colorado Trial Lawyers and the Colorado Division of Wildlife. When she isn’t piecing together sentences, the self-proclaimed “Cheesehead” enjoys hanging out with her three kids and assortment of family pets, running, playing golf, hiking 14ers, horseback riding and skiing. As a mother to two (at one time three) competitive swimmers, her favorite fragrance is eau de chlorine. During football season, she can be found cheering for the Buffs on Saturdays and screaming when the Packers score on Sundays. She loves talking sports and giving recommendations on cheese curds.

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Topics: Home Buying