November 7, 2011
After finding a home they like, want to own and live in, home buyers still have to negotiate with the current homeowners. From making an offer to closing a deal, home buyers should consult their real estate agents who can help successfully secure their new homes.
One common difficulty is knowing what kind of initial offer to make. Home buyers want to pay as little as possible, but there is a limit on what sort of bid home sellers might reasonably be expected to accept. While a first offer below that level might be a good way to establish a negotiating position, too low an offer may anger the home sellers, especially if they believe the buyer is being unrealistic or demanding.
There are a number of factors that might cause home sellers to consider accepting a lower offer. If their property has been on the market for some time without selling, they may be more prepared to accept an offer in the interest of closing a deal and moving on with their lives.
If comparable properties are selling for less, then it may be time to present a lower offer. It may be appropriate to note these factors, or the other reasons for the offer. One real estate agent told MarketWatch including such evidence can prevent tempers from flaring, since it helps home sellers see the price rationally rather than emotionally.
In the end, the home sellers will determine what price they are willing to accept. While buyers should not necessarily give them what they ask for, understanding the sellers' and their reasons may be helpful. For example, if the seller needs a certain amount of money for a new home, he or she may not budge below that price.
Placing a lower offer means being willing to negotiate upward, but the difficult part is deciding how far upward. Buyers should know how much they can afford and how much a home is worth to them. Ultimately, a negotiator who is unwilling to walk away to avoid poor terms is at a disadvantage.
Clear communication with the home sellers is important. If they think an offer is the highest a prospective buyer will go when it is not, they may end negotiations prematurely and sink a deal. At the same time, home buyers should avoid giving away information when they can. Seeming too eager for a property, whether that impression is true or false, will likely mean paying more. A careful balance between honesty and discretion can be invaluable.