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buyer
negotiating tips
Some
people are born negotiators.
They'd negotiate the time of day if they had the opportunity. Many
people, however, feel uncomfortable negotiating. If you fall in the second
camp, think of a home purchase negotiation as a dialogue between you and
the seller. It's a forum for exchanging ideas with one another to see if
you can come to mutually agreeable terms. If you can: Great. You've bought
a home. If you can't: that's OK, too. You'll find yourself another home
and the seller will find another buyer.
There
are many ways to negotiate a home sale.
It's hard to generalize because each transaction is unique. But, in
most cases, a successful negotiation involves give and take from both
parties. Keep in mind that you want the sellers to feel good about selling
their home to you. You may need their cooperation during the transaction.
For
example, you may want to renegotiate the purchase contract if your
inspections reveal unanticipated defects. You'll stand a better chance of
successfully working through these negotiations if you've built good
rapport with the sellers. A cooperative, rather than adversarial, stance
usually produces good results.
FIRST-TIME TIP:
In the spirit of give and take, you may want to plan your negotiation
strategy so that you give up something you want in exchange for the seller
giving you something you want.
For
instance, let's say you know that the sellers prefer a short close, and
you think his price is a little high. You might start the negotiation
offering a 60- or 90-day close and a price that's a bit below the top
price you'll pay. When the seller counters back with a 30-day close, you
can accept this if the seller is willing to sell at your price.
With this
strategy, it's effective to save a bargaining chip, or two, until a
critical point in the negotiation. That bargaining chip is often your best
price. You may be willing to pay the seller's price if he agrees to take
care of some deferred maintenance. In this case, you would hold back on
agreeing to pay his price until the seller agreed to make the necessary
repairs.
Another
strategy that can break an impasse is the "either/or" approach. With this
strategy, you give the sellers two options. They can take their pick.
Suppose
you're locked into a lease that runs 4 more months, and costs you $2000 a
month. You can't afford to pay the seller's asking price and make double
monthly payments for mortgage and rent.
 The
seller wants to close in 30 days; you prefer 90 or 120. If the home is
fairly listed for $300,000, you might offer to pay $300,000 with a 120-day
close, or $294,000 with a 30-day close. The seller can choose. By the way,
it can further the negotiations if the other party understands your
circumstances.
It helps
to plan out your negotiation strategy in advance. Find out as much about
the seller's situation as you can. Determine the highest price you're
willing to pay. Make a pact with yourself to walk away from the property
if you have to significantly overpay to get it.
Sometimes
it's best to stand firm during negotiations. Perhaps you've negotiated to
your best and final price. You may want to lay your cards on the table and
let the other party know this. There's no rule that says you must counter
with a new price.
THE
CLOSING:
And remember, all elements of the purchase agreement are negotiable,
not just the price.
By: Dian Hymer
Dian Hymer is author of
"Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
Copyright Dian Hymer
Distributed by Inman News Features
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