Negotiating a contract can sound intimidating. Don’t let it scare you. Negotiations are a critical part of any real estate sales contract and there is nothing wrong with doing all you can to get the best deal possible.
Check out these 7 tips to strengthen your negotiating skills.
- First and foremost, hire a real estate agent. Sure, you could go at it alone, but a successful negotiation starts with having the knowledge and experience on your side.
- Get pre-approved by a reputable mortgage lender and obtain this conditional approval in writing. Be sure you are 100% transparent with the lender, allowing them to spot and solve any potential roadblocks early in the process. Having financing in place will make your offer much more compelling in the negotiation.
- Everything is (potentially) negotiable! This is important to understand, because if you don’t ask you don’t get. Keep in mind that requests should be respectful and within reason and remember the seller also has the right to refuse. It’s then up to the buyer to decide whether or not to move forward with the deal. Price is the most obvious of the negotiable items. But closing costs, closing dates, financing contingencies, home warranties, repairs, etc. are all things to be considered during the negotiation process.
- Be prepared to walk away. This may be the hardest part of any negotiation. While on the surface it may seem like you “lost”, the reality is that the deal did not meet all of the criteria you needed for it to be successful. Understanding the local market, being aware of other properties that are of interest to you, and having a clear understanding of your financial picture and budget will allow you to negotiate without emotion. This is critical to avoid entering into a deal that could result in buyer’s remorse.
- Avoid too many back-and-forth requests. Nothing can sour a seller on a deal faster than endless additional requests after an initial contract is offered. Make sure you thoroughly do your homework and make your initial offer as close to where you would like it to be as possible. There will always be things that come up during home inspections. While these are understood, you should avoid making additional requests for price reductions, financing assistance, etc. once the initial offer is accepted. Keep in mind the seller also has the right to just walk away from any deal.
- Contingencies are a drag! While sometimes necessary, sellers often are reluctant to enter into a deal that involves too many, or any, contingencies (home sale, etc.). No one likes to feel like a hostage to something out of their control. It’s best to limit these or totally avoid them when possible.
- Lastly, STAY POSITIVE! Buying a home is supposed to be an exciting, life-changing experience. Don’t let emotions derail you from your goal. Keep in mind, the person you are negotiating with is simply doing exactly what you are doing, just from the opposite perspective.
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