You’ve looked at enough houses to fill an entire season of House Hunters and finally picked one to buy. Now you’re ready to make an offer.
Your agent can help guide you through this nail-biting phase of negotiating a house price, but ultimately, you call the shots. Here’s how to negotiate like a boss.
Thinking house price is all that matters
That house with a price point $15k below your budget? It may seem like a deal – until you add on the costs of maintenance and replacing the aging appliances.
When developing your offer, calculate in the costs that will go above and beyond a mortgage payment. Then you can negotiate with an eye on the total cost of owning the house, not just the sticker price.
Refusing to back down on small repairs
Before you draw a line in the negotiation sand over, say, a deck with some rotten boards, ask yourself if it’s worth losing the house over a repair that would cost less than $1,000.
Say the house price is $250,000, which makes that deck repair less than half of one percent of the cost of the house. There’s a lot of emotional energy at this point in the process, so give yourself a break rather than dickering over it.
Waiving formalities because you’re so in love with the house
Don’t be so blinded by house love that you do something silly like skip some of the formalities of home buying, such as the home inspection or the appraisal, in an effort to close the deal. Those steps, and others like a termite or septic inspection, are known as contingencies. They exist there to protect you from ending up with a six-figure money pit.
There are other ways to sweeten your offer and get that house:
- Pay some of the seller’s closing costs
- Offer a fast close
If this is your first house, speed is an ace up your sleeve because you can move faster than someone who can’t buy a new house until they sell the old one (another type of contingency).
Getting hung up on a few grand
You offered $198,000. The seller won’t budge from $200,000.
Before you walk away, consider this: Two grand is a lot of money, but in the house-buying world it’s not so much. At an interest rate of 4%, with 20% down on a 30-year mortgage, that additional $2,000 will add just $8 a month to your payment.
If you can swing it – maybe you can cut a small thing out of your budget each month – it could be worth it.
Offering less because the decor is hideous
The faux-Tiffany swag lamp and trippy orange-and-brown wallpaper make your eyes itch. So you’re planning on offering less – way less.
Before you do that, know the market. If it’s a seller’s market, your offer may be seen as an insult especially if the home’s in good shape. And just like that, you’ve lost your dream home.
When you’re ready to make that offer, look past the little stuff that you can easily change, and focus your negotiations on what matters, like the location and the bones of the house.
Leanne Pottsis an Atlanta-based journalist and serial home remodeler. She’s tackled five fixer-uppers and is working on a sixth. She’s written about everything from forest fires to dog-friendly decor and spent a decade leading the digital staff of HGTV.
This article provided through a partnership between the Post-Dispatch and St. Louis REALTORS®. Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®. Visit St. Louis REALTORS® at stlrealtors.com.
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