Whether it’s your first or second home buying experience, financing should always be a major consideration. Buying a home is one of the most costly things, hence the need to get the best deal. House negotiations determine whether you pay thousands of dollars more or less on the real estate property. If you don’t get a reasonable deal, it might be difficult to find a financier who is willing to sponsor you.

Below are some tips to guide you through the negotiation process.

Understand the Market Trends

The biggest mistake you can make is starting your negotiations on the wrong foot. If you don’t have any knowledge about the average prices of the kind of house you want, it will be difficult to get a reasonable deal. You need to do prior research on the local market trends so that when you start negotiating, you’ll have an idea of where to start.

If you’re working with a real estate agent, have a sit down to plan the negotiations. Your real estate agent will have enough knowledge about market dynamics.

Give Yourself Multiple Options

Negotiations are always one-sided whenever you have emotions attached to a specific property. You will always be on the receiving end if the seller realizes your options are limited. To avoid this, review a number of houses before narrowing down to a few that you love.

You need to scout a number of neighborhoods and houses before settling on one. This gives you an idea of what others are asking for a similar property within the same neighborhood. It’s always advisable to have a plan B so that when one negotiation falls through, you’ll have another option to consider.

Negotiate Based on the Cost of Owning the House and Not the Asking Price

Every house seller will quote a figure that they feel is enticing to them. They will most likely be looking for an amount higher than the actual valuation. However, you don’t need to flow with their quote if it’s way above what is reasonable. Buying a house cheaper than what the seller is asking might be a false victory. This is because you might be buying above the worth of the house just because you negotiated based on what was quoted by the seller.

The trick here is to consider all the costs you will incur after buying the house. These include:

  • Agency fees
  • Points
  • Closing costs
  • Interests

You must also factor in any renovation expenses you might incur and the monthly cost of running the house.

Don’t Be Blind About the Future

A house that offers room for expansion and modification is ideal. You might be doing it wrong if you’re only considering your immediate needs when buying a home.

For instance, if you have the vision to expand your house, is there enough room for expansion? Have a long-term perspective about what else you can do with your home. You should also consider the likelihood of an increase in property value.

Posted by Pat Leavy on
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