Negotiating Tips For Buyers And Sellers
Posted by Richard on July 7, 2020
Whether you’re a buyer or a seller, you can find something good about the current real estate market.
Interest rates are low, making for more appealing mortgages (and an abundance of available loans). And inventory is a little tight, making for less competition.
So, if you’re a buyer, you can find a ready loan at a good rate. If you’re selling, you’ll probably have less competition.
All of this begs the question: How do you negotiate in this climate? Or do you even try to negotiate?
That might depend on where you live. Always consult a REALTOR before making an offer.
As a buyer, remember the number of houses for sale is low nationwide. Even in the coronavirus crisis, median home prices have increased. It’s probably not true that most sellers are desperate because of job losses or financial hits. Buyers really should not expect to get a lot for a little.
In fact, you can easily lose your dream house by bidding low, even in the crisis environment. If supply is low, make a robust offer. Sometimes it makes sense to bid for higher than asking price. Just be sure your price makes sense to you and the bank, as the property will need to be appraised prior to a mortgage getting approved.
Sometimes a personal letter will go a long way to forwarding your offer. Children selling the family home might be encouraged to know that the buyer will love it, for example.
You can also consider requesting repairs, credits, or adjustable deadlines if you offer full price.
As a seller, even if you are in a hurry to sell, resist the urge to lower your price. Home prices are not declining, they are generally rising.
Remember that creativity can make or break a deal. Rather than reduce your price, seek other incentives that appeal to buyers like credits, improvements, furnishings, or more flexible closing deadlines.
A counteroffer doesn’t need to be in the middle. If a potential buyer offers $10,000 less than asking price, the temptation is to split the difference. Consider countering at the price you want, and offering incentives. Or hold firm.
Some real estate pros recommend asking for solid earnest money of up to 5 percent to ensure the buyer is serious.