Buying real estate, especially those for first time home buyers can result in a wide variety of emotions. Fear, excitement, and a sense of being overwhelmed are many that I hear from my mortgage clients.
All real estate is local, so while in some areas, the buyers are in control, in others, the seller is in control. Regardless of the situation, negotiations skills are important. Most of the time, the actual buyer is not in direct control of the negotiations, your Real Estate Agent is. So be sure to pick a good one, and to use the following negotiation tools to get the home you want, at the price you want:
Keep your emotions at bay – One can get excited over the perfect property. Being transparent, or having a poker face with your emotion may lead to getting a better deal. If you have already become too attached to the property, you might end up compromising the deal and giving in to the sellers demands. Be as objective as possible and take control of your emotions.
Study the local real estate market – Whether you are buying through a real estate agent or you are on your own, you must have a good knowledge of how much is the worth of the properties around, especially the one which you are most interested in. Studying the market will give you a good picture if the property you like is underpriced, overpriced or just priced just right. Do not just go into the field of negotiation without having the right knowledge of what you are getting yourself into. Knowledge and sound assessment is the key.
Discover the selling motivation – Sellers sell for many reasons. Knowing why will help greatly in your negotiations. Have they been in the house for 20-years, and own nothing? Do they owe exactly what is is worth? Have the kids received the house because of a parents death and just want to dump it? Try to find out the selling motivation and use it to your benefit.
Don’t be afraid to make a low offer. Housing is the most expensive item the average person ever buys. We’ve all heard that making a low-ball offer will offend the seller. Yes, you might. Big deal. 95% of them will still negotiate on price. So don’t be afraid to start realistically low, and near the appropriate value of the home. You can always counter-offer higher.
Be prepared to walk away. Walking away is the most powerful tool you have. It may not feel like it at the time, but I promise if the numbers don’t work on this house, you’ll soon find another that you just just as much were the numbers to work.