home buying negotiation tips

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Post Reply
alloykat
Posts: 64
Joined: Thu Nov 24, 2016 12:02 pm

home buying negotiation tips

Post by alloykat » Thu Mar 23, 2017 9:57 am

I know when purchasing a home the buyer is always at a disadvantage because the goal is to get the highest price for the commission benefit to all realtors and the seller. In addition to the ones below, does anyone have any ideas or suggestions for tips to assist the buyer in negotiating the price down?

1. I know coming in as a strong cash buyer holds some leverage because of the ability to expedite closing.
2. I know asking for credit based on inspection findings has merit.
3. I was thinking of offering the buyer's agent a 10K bonus in writing if he/she can get the price to X dollars.

Let me know if you have any other ideas. Thanks.

bluebolt
Posts: 555
Joined: Sat Jan 14, 2017 9:01 am

Re: home buying negotiation tips

Post by bluebolt » Thu Mar 23, 2017 10:54 am

alloykat wrote:I know when purchasing a home the buyer is always at a disadvantage because the goal is to get the highest price for the commission benefit to all realtors and the seller. In addition to the ones below, does anyone have any ideas or suggestions for tips to assist the buyer in negotiating the price down?

1. I know coming in as a strong cash buyer holds some leverage because of the ability to expedite closing.
2. I know asking for credit based on inspection findings has merit.
3. I was thinking of offering the buyer's agent a 10K bonus in writing if he/she can get the price to X dollars.

Let me know if you have any other ideas. Thanks.
This is really dependent on your individual market conditions. If it's a seller's market, there's not much leverage you have.

1. Cash offers are great, especially if the sellers are eager to close quickly. But, in a tight market, it may just be a tiebreaker among similar offers. You're unlikely to get a significant discount. If the place has been on the market for a while, you have a lot more negotiating power.

2. Not sure what you mean by this. But you certainly could make your offer more attractive by saying you'll only ask for major items found in inspection to be rectified (over $1K, for example). If there are things found in inspection, you could use it to negotiate the price down, but if there are a lot of little things, the seller may not take you too seriously. Again, depends if you are 1 of 15 offers or 1 of 2.

3. That's creative. I would check to see if it's OK to do something like that. You're also assuming that they can negotiate better than you can. Not sure what price range you're looking at but $10K is likely to be more than the agent's take home commission if they work for someone else.

User avatar
whaleknives
Posts: 1210
Joined: Sun Jun 24, 2012 7:19 pm

Re: home buying negotiation tips

Post by whaleknives » Thu Mar 23, 2017 1:27 pm

Never make a second offer on a property. There's another house out there for you.
"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."

mak1277
Posts: 509
Joined: Fri Jan 09, 2015 4:26 pm

Re: home buying negotiation tips

Post by mak1277 » Thu Mar 23, 2017 1:48 pm

whaleknives wrote:Never make a second offer on a property. There's another house out there for you.
I've always taken the opposite point of view...if my first offer is accepted then it means it was too high. I've never had the misfortune of buying in a super competitive market where people go above the asking price though.

CppCoder
Posts: 556
Joined: Sat Jan 23, 2016 9:16 pm

Re: home buying negotiation tips

Post by CppCoder » Thu Mar 23, 2017 1:50 pm

  • Make offers on homes that have been on the market significantly longer than the average. Realtors would prefer volume to price. They don't make money working to sell a house for $10k more if it takes them an extra six months.
  • Make offers on empty homes. Once someone has had to move (for a relocation, say), they have the incentive of not carrying two mortgages.
  • Make offers on homes effectively being sold by banks (short sales, foreclosures). They don't want these assets on their books. Cash is more valuable to them than real estate, so they might be willing to bend on price to make a sale.
  • Make offers on houses where the tenant is moving due to corporate relocation. My company gives a bonus to employees who sell their houses quickly (because the company buys your house from you if you can't sell it, and they don't want to own your house).

Smorgasbord
Posts: 159
Joined: Fri Jun 10, 2016 8:12 pm

Re: home buying negotiation tips

Post by Smorgasbord » Thu Mar 23, 2017 1:53 pm

Before I start putting in offers, I find two houses that I would like to live in. Having a plan to walk away gives you a lot of power in the negotiation. Admittedly, I don't live in an area where houses sell in a matter of hours with multiple offers, so this advice may not be applicable to your situation.

User avatar
whaleknives
Posts: 1210
Joined: Sun Jun 24, 2012 7:19 pm

Re: home buying negotiation tips

Post by whaleknives » Thu Mar 23, 2017 2:00 pm

mak1277 wrote:
whaleknives wrote:Never make a second offer on a property. There's another house out there for you.
I've always taken the opposite point of view...if my first offer is accepted then it means it was too high. I've never had the misfortune of buying in a super competitive market where people go above the asking price though.
By second offer, I meant one where a first offer by others is pending. If you make a second offer, you either stop looking, because your second offer is pending, or keep looking but can't act on anything you find, because your second offer is pending. Even the realtor-guaranteed failure to finance first offer did go through, after the buyers' parents cosigned the mortgage.
"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."

mak1277
Posts: 509
Joined: Fri Jan 09, 2015 4:26 pm

Re: home buying negotiation tips

Post by mak1277 » Thu Mar 23, 2017 2:04 pm

whaleknives wrote:
mak1277 wrote:
whaleknives wrote:Never make a second offer on a property. There's another house out there for you.
I've always taken the opposite point of view...if my first offer is accepted then it means it was too high. I've never had the misfortune of buying in a super competitive market where people go above the asking price though.
By second offer, I meant one where a first offer by others is pending. If you make a second offer, you either stop looking, because your second offer is pending, or keep looking but can't act on anything you find, because your second offer is pending. Even the realtor-guaranteed failure to finance first offer did go through, after the buyers' parents cosigned the mortgage.
Oh yeah...gotcha...agree.

SleepKing
Posts: 233
Joined: Mon Mar 02, 2015 8:45 am

Re: home buying negotiation tips

Post by SleepKing » Thu Mar 23, 2017 2:46 pm

We were in a month to month rental. Thus could offer buyer 'move whenever you want' to help their logistics after the sale and closing date etc.

User avatar
Clever_Username
Posts: 741
Joined: Sun Jul 15, 2012 12:24 am
Location: Southern California

Re: home buying negotiation tips

Post by Clever_Username » Fri Mar 24, 2017 9:46 pm

Smorgasbord wrote:Before I start putting in offers, I find two houses that I would like to live in. Having a plan to walk away gives you a lot of power in the negotiation. Admittedly, I don't live in an area where houses sell in a matter of hours with multiple offers, so this advice may not be applicable to your situation.
I did this by accident and it's turning out great. The first of them I'm writing the offer this weekend, and if I have to walk away, I'll walk away. Falling in love with the house, I hear, is the last step, not the first.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, [i]Layer Cake[/i]

Alto Astral
Posts: 676
Joined: Thu Oct 08, 2009 10:47 am

Re: home buying negotiation tips

Post by Alto Astral » Fri Mar 24, 2017 10:34 pm

It was a sellers market last year for us. Multiple-offer situation. We loved the home. Luckily got it. Never regretted offering over asking price. This was the first home we bought so I am not experienced enough to give tips. But I can say this - after two years of searching we felt this was the one. We would have been upset if we had lost it for just a few thousand dollars.

Post Reply