Homebuyer tip: Don’t commit these negotiation blunders
As a homebuyer, unless you are buying direct from the owner, you’ll not negotiate with the seller of the home you have your eye on.
That’s your real estate agent’s job. But he or she negotiates on your behalf. So, when we talk about buyer negotiations with sellers, we’re referring to indirect negotiations through your agent, as middle-person.
Unless you’re an attorney, a salesperson or in another occupation that requires negotiating skills, we think it’s safe to say that it’s not something you do on a regular basis.
If done correctly, negotiation requires subtlety and the ability and willingness to find a win-win for all parties.
Certain negotiating tactics can railroad a real estate deal, instantly. Let’s take a look at some of these to help you avoid losing out on that home you want.
Using the home inspection as a negotiation excuse
The one blanket statement that we feel safe in making to all homebuyers is that they must get the home professionally inspected. Yes, even recently-built homes.
After the inspection, the inspector will issue a report, listing all of the problems or potential problems he or she found during a visual inspection of the home.
Some of the problems may be significant but most are not. If you find the report somewhat acceptable, but would like a few items repaired or replaced, we will reopen negotiations with the seller.
This is where some homebuyers become unreasonable, using nit-picking in an attempt to drive down the price of the home.
Keep in mind that, unless the home was listed for sale “as-is,” homeowners are only obligated to remedy defects that your lender or insurer will require (typically those of a health and safety nature), those specifically named in the purchase contract and those required by law.
The seller is not required to adjust the price instead of making repairs. And, most sellers won’t even consider replacing or repairing defects that can be remedied easily and inexpensively.
Everything, however, is negotiable and your choices in the deal include:
- Asking the seller to make the repairs
- Asking the seller to decrease the price of the home to compensate for the cost of repairs
- Walk away from the deal
The homeowner’s choices include saying yes or no to the first two, coming up with a list of what he or she is willing to deal on, or deciding not to continue with the sale.
If you really want the home, think twice about reopening negotiations unless the home’s defects are major and will require great expense.
Insisting on making a lowball offer
We understand that you want the best deal possible, but a very low offer on a home you truly want to purchase is typically a foolish negotiating tactic.
In a buyers’ market, when there are lots of homes for sale but few buyers, you may get away with an offer under asking price. But a ridiculously low offer will most likely be treated as an insult by the seller.
It also makes you appear like a bargain hunter, ruining your credibility in the eyes of the seller.
A homeowner has several choices when confronted by a low offer. Unfortunately, many of them feel so insulted they won’t even respond.
So, instead of getting a chance to haggle on the price of the home, you’re shut out. Completely.
Assuming the seller wants to part with personal belongings to get the home sold
Sure, in slow markets, sellers may do almost anything if their home has been sitting on the market and they need it sold quickly.
But, before you demand that they leave the home’s furniture, appliances and the dog, keep in mind that desperation on the seller’s part is the exception, not the rule.
Unless expressly stated in the contract, the homeowner is selling their home, not their personal belongings.
Asking for too much makes you appear greedy – and not someone a seller is likely going to want to negotiate with.
The most important thing to remember, especially in a market that favors sellers, is that the seller may very well be negotiating with other buyers. Go in with your best and highest offer and try to keep it as “clean” as possible.
We’re happy to show you how.