Many homebuyers make the error of believing that the main thing they should be negotiating around is the list price of the home they are interested in.
In reality, price is but one of multiple important real estate points worth negotiating for, and, arguably, not the one that might end up saving you the most money. As you approach the negotiation for the purchase of a home, focus on factors of the house that are not immediately related to its total list price, but that are connected to its overall value. You can save money and stress in your housing negotiations by emphasizing smaller aspects of the home that have a more long-lasting effect on your wallet, such as appliances and upgrades. To get the most out of your home buying negotiations, center your negotiating points on elements that may have a lasting impact on your enjoyment of the home itself over the years. Read the sections below for a few places to start.
An oft-overlooked category of home negotiations are bids submitted without regard to the keeping or removing of appliances. Make sure you clarify early which appliances the seller includes in the list price of the house. If you want some of the appliances that are not included in this list price, you can negotiate to keep them. Similarly, if you have your own appliances and do not need any of what is currently available in the home, you can center your negotiations on having the old appliances removed from the property. If you are working with a builder or a particularly open seller, you can also work upgrades into the official discussions for the transfer of the home. It is vital to realize that an appliance, though typically a one-time cost, provides a service (which would otherwise cost money or time) and lends value to the overall worth of your home. Acquiring appliances with the purchase of your home not only saves you the immediate amount of their individual purchase price, but also the time, energy and money to buy, ship or install them on your own. Think of appliances in your home buying negotiations as both long-term and short-term money saved.
Another potential avenue for real estate negotiations surrounds the inclusion of furniture and repairs. If the seller’s furniture, or that provided for staging by the realtor, appeals to you, make the acquisition of it a central focus of your home buying negotiations. Consider shapes and colors of the furniture you already have and whether it will suit the home you are buying. Very often, homebuyers do not realize that what they had in their former house will not work in their newly purchased home. You can save yourself a great deal of money and many headaches by negotiating to keep the furniture you see on display if it appeals to you. This tactic also benefits the seller by diminishing his or her moving costs and perhaps unburdening him or her of unwanted past goods. This is especially important to first-time homebuyers who may want to minimize extra expenses, or who do not have all the furniture needed for a new home.
Similarly, you can try negotiating for the inclusion of necessary repairs on the house. You need these repairs in order to safely and comfortably live in the home; the seller needs these repairs in order to swiftly and safely sell the home without worry of sanctions for any sort of negligence. Present your negotiations for necessary repairs with that angle and you are saving yourself the costs, time and labor of the repairs as well as helping the seller keep above par in terms of code. For purely cosmetic repairs, you might suggest your requests through the approach of interior or exterior curb appeal. Note that first impressions are lasting and that unsightly cosmetic problems with the house can avert less avid buyers.
It might seem counterintuitive to include in your real estate negotiations a direct means for backing out of the negotiations. However, contingencies worked into official offers typically have the opposite effect. A contingency allows the buyer the protection of evading a bad purchase if the house turns out to be such. A contingency likewise protects the seller from liability due to unforeseen trouble or costs associated with unknown imperfections in the house, your credit approval or even the home’s current appraisal value, which can rapidly change. You can negotiate for contingencies that involve clear title, home appraisal, the sale of your current home, mortgage financing, home inspection and others. As you consider how to write useful contingencies into your home buying negotiations, take stock of particularities of the house you are negotiating for. Does it have a swimming pool that might need a separate inspection for safety or leaks? Is there an outside structure, such as a barn or detached garage that could be overdue for a termite inspection? Items such as these, including commonly overlooked simple items such as foundation inspections, should be your focus as you attempt to minimize the risk in your home purchase.
Between the acceptance of a real estate offer and the closing date, time can certainly fly—unless, of course, you specifically dictate otherwise in your real estate negotiations. Negotiating for shorter or longer closing windows or shorter or longer inspection timeframes can be one of the most beneficial negotiation points in your entire home buying process. This is where your research on the seller‘s personal reasons for moving, family situation or other details can become very handy. Is there a divorce involved? A quick closing negotiated into your bid may look highly attractive. Is the seller still trying to find a new house or unload unwanted possessions? A longer window for closing or inspections can give the seller something many people consider more valuable than money—time.
With time functioning as such a commodity and a currency in real estate negotiations, offering your seller a leaseback option can give you leverage to ask for other items (contingencies, repairs, furniture, etc.) that you truly want and might have felt you had little right to ask for. A leaseback allows the seller to remain in the house, post-closing, for an agreed-upon amount of time and rent in order to get his or her affairs in order. This can be a coveted negotiating point for families with children who might not relish the idea of spending gap weeks in a hotel, sellers with a great deal of moving arrangements still to make or even simply people who want to spend one last birthday or holiday in their former home. Use leaseback options to buy yourself time as well, if you need it. It may be that you are making a move across the country and need the time to travel without worrying that your new home is sitting empty, maybe you have family affairs to tie up in your previous community or you could just have your heart set on moving during a certain, specified month. Write an official rental agreement into the leaseback portion of your home bid negotiations and, if the seller agrees to the leaseback, you can use it as a leveraging point for something else you desire and thus gain more than the benefit of precious time from the arrangement.