So at last, you’ve found a house you want to buy. Now the negotiation game begins.
Should you offer near the asking price? Make a lowball offer? Will the sellers counter? Tell you to take a hike? As you wait for your cell phone to ring with news, seconds tick by as loudly as the telltale heart.
Despite the agony of negotiating a home purchase, plenty of folks made deals this spring. Sales of existing homes surged in March, up 7 percent, according to the National Association of Realtors April report. It’s a buyer’s market in much of the country, putting you in a great bargaining position.
But many still stress out when making an offer. Their biggest mistake? “They react too quickly,” says Chad Hughes, a realtor with ERA Colonial in San Antonio, Texas, and a participating firm in the USAA MoversAdvantage network. “Buyers have the best advantage if they take their time. The longer they wait, the more anxious the seller will be,” Hughes says.
We asked several real estate and negotiation experts for advice on getting the best deal—from initial offer through the closing date. Turns out, the “best deal” is a relative term. Some value the lowest price. Others pay more for a home they love. Whatever your priority, stand tough in negotiations.
Sure, there’s give and take, but, ultimately, it’s about getting the right home for you. These twelve tips can help you negotiate a deal—by yourself or through your real estate agent—on your new home.
1. Patience is a virtue when buying a home.
Hughes’ advice to take it slow, even in making an initial offer, can mean sellers make concessions later. And you’d be following negotiation consultant Michael Schatzki’s first law of negotiation: Don’t just do something. Sit there. “If you are in a rush, don’t let them see that. If the other side is in a hurry, slow down,” says Schatzki, author of Negotiation Speak.
But inaction means the house could also go to a rival bidder. “Waiting assumes you would be willing to walk away,” notes Roy J. Lewicki, a business professor at Ohio State University and author of Mastering Business Negotiation. “What’s more important to you—your money or your time?” he asks.
2. Walk through the home before you make an offer.
Realtors in the USAA MoversAdvantage network say one of the most common deal breakers buyers make is putting an offer on a house sight unseen, or making an offer on a house that one spouse has seen and the other has not. It happens a lot with military families who are moving from one part of the country to another and increases the chances that a contract will fall through, making the whole process more nerve-racking for all parties.
3. Use online resources with caution.
YouTube videos of houses for sale, online tax records, real estate sites, such as Zillow.com—all are helpful, but some buyers misinterpret information or trust inaccurate information. “True market value versus the online tax assessor’s figures and Zillow reports can be different numbers,” warns realtor Bill Kuhl, with Coldwell Banker United in Fort Walton Beach, Florida, also a MoversAdvantage participant.
4. Aim below the seller’s bottom line.
“Talk to your broker and ferret out why they’re selling to help guess their ultimate bottom line,” Schatzki says. Make the initial offer below that number, saving room to negotiate up. Other ways to generate an initial number? Hughes recommends offering 10 percent less than market value. Lewicki says to consider offering 90 percent of the asking price for a fairly priced home. But be aware that 90 percent might be low if the house is priced fairly. It’s ideal to find out how many offers the seller has received, how long the house has been on the market, and how fast a closing is desired.
