Although buying a house can be an exciting experience, negotiations can be a daunting task for many.
“Negotiating your first home purchase requires a combination of preparation, strategy, and a level of flexibility,” said Arnold Maritz from Lew Geffen Sotheby’s International Realty.
“It’s also important to remember that negotiation is a two-way street, and it’s essential to strike a balance between getting the best deal and maintaining a positive relationship with the seller.”
With this in mind, Maritz provided a host of tips to help buyers get the best possible deal.
Firstly, before entering the market, buyers must do their homework by researching the market and finding comparable properties in the area. Knowing the going rates will help with their negotiation strategy.
Buyers should also know their limits and be clear about their financial constraints. Understanding one’s limits prevents one from overcommitting and ending up with financially burdensome property. Insurance, taxes, rates and other monthly costs must also be considered.
In addition, buyers must also be patient and flexible, as negotiations can take time. Flexibility will also ensure that both the seller and buyer have a favourable outcome.
If setting a budget and doing research is not enough, consulting a professional, such as a real estate agent, can assist with the negotiation process.
Crafting the offer
When crafting an offer, there are also various factors that can influence the outcome.
For instance, the condition of a property can impact its value. Hiring a home inspector can show that an older property needs major repairs – possibly reducing the purchase price.
“A thorough inspection is a powerful negotiating tool and can also save you from buyer’s regret and costly repairs later on,” Maritz said.
“Hire a reputable home inspector to assess the property’s condition and identify any potential issues. Armed with this information, you can negotiate repairs or a reduction in the purchase price based on the inspection report.”
“When presenting your findings to the seller, focus on significant issues that may impact the property’s value or safety. Use the inspection report as a basis for negotiation, aiming for a fair resolution that benefits both parties.”
In addition, market trends, such as supply and demand, interest rates, and economic conditions, can influence the negotiation process.
Knowing the seller’s motivation can also help in negotiations, as a seller motivated to sell quickly may be more willing to alter price or other terms.
Location is also crucial, as proximity to schools, shopping centres and more can affect a property’s value.
Making the offer
The offer prices are crucial in the negotiation process, and crafting a strong offer, which considers the property’s market value, the budget, and any unique features that add value to the property, is essential.
Buyers should still include contingencies in their offer to protect their interests, such as a home inspection and mortgage approval.
Moreover, adding a personal touch to the seller, such as a well-written letter, can help an offer stand out in a crowded market.
If the seller responds to the offer, buyers should be prepared to negotiate terms, such as purchase prices, requesting repairs based on findings and agreeing on a closing timeline.
However, not all deals will be worth the buyer’s time.
“While it’s exciting to find a home that you love, it’s essential to be able to recognise when it’s time to walk away from a deal. If negotiations reach an impasse, or if the terms are no longer favourable, you must be prepared to move on,” said Maritz.
“Having a clear understanding of your priorities and deal-breakers will help you make this decision. Don’t let emotions cloud your judgment; remember that there are always other properties on the market.