Tips for Negotiating a Home Purchase
Remember that the listing, or asking price is what the seller would like to receive for the home but is not necessarily what the seller will settle for. Therefore, it is important to also know value. Before you make an offer, check recent sales and listing prices of comparable neighborhood homes and compare them to the seller's asking price.
Other tips for negotiating include:
- Be flexible. Never say "take it or leave it." That can sour negotiations and ruin the deal.
- Never show your hand or reveal your next step.
- Each time you increase your offering price, ask for something in return, such as repairs, appliances, even lawn furniture.
- If you plan to pay cash or have a tentative commitment for a loan, use your strong financial position as a negotiating tool.
- Don't let emotions get in the way of negotiating the best deal. Leave irrational feelings at home.
Interest Rate Negotiation
A few lenders will negotiate the mortgage rate and number of points on a loan. However, this is more the exception than the rule with established lenders. As always, shop around and know the market before you enter a lender's office. Rates are often published in local newspapers and on the Internet.
You may have more success in negotiating the interest rate when dealing directly with a seller who has agreed to finance your loan. The seller is likely to be more open to negotiation, particularly when motivated to make a quick sale.