Real Estate

How to Negotiate with the Seller When Buying a Home?

When buying a house, even the seller expects you to negotiate the price with them. They even set the price slightly higher than the property’s value in the market so that the final price compensates for the negotiations.

Negotiation might seem complicated and daunting, but if you’re well prepared and equipped, that will help make it easier.

Things to Consider Before Negotiating

Buying a house requires a significant amount of preparation and organization. However, checking off items in the list in order of priority makes the whole process simple enough. Consider the following before starting to negotiate:

Real Estate Lawyer

Since we are focusing on Edmonton, first and foremost, you should consider hiring an Edmonton real estate lawyer for sound legal counsel and proper legal representation. Closing the real estate purchase involves significant legal documentation and procedure. It’s better to be prepared to respond to any legal circumstances appropriately.

Realtor or Agent

Nowadays, many think they don’t need an agent or realtor since real estate listing websites are so readily available. However, an agent doesn’t merely show and describe the house and introduce you to the seller. They also help determine the final selling price and help you make the offering.

Secure Finances

You can’t just walk up to a seller and throw a price at them without first proving your ability to get a mortgage. If you make your offer without proof of funding, most likely, you won’t be taken seriously by the seller and will eventually be passed for the next legit offer.

The mortgage approval is a notice from mortgage lenders confirming your qualified mortgage amount and assuring the seller that you can pay for the offered price.

Market Research

It’s always recommended that you know the market before moving on the property. The asking price, room for negotiation, and the final selling price all depend on the level of interest in the property in the market. You can also check the best fsbo sites as they have listing of the houses that owners are selling directly, without the help of any agent.

How to Negotiate With the Seller When Buying a Home?

While you negotiate the price before buying a house, the following tips might be constructive:

Get an Inspection

Inspections often result in great details about the house that help you negotiate the final selling price. Inspectors will find any issues with the house and provide you with a report. You can then include the concessions for the problems while negotiating with the seller.

Suppose any of the issues revealed is a deal-breaker. You can ask the seller to fix it, reduce the price, get credit for the closing cost, or even cancel the purchase (provided the offer includes a contingency for inspection).

Note that appraisals and inspections are not the same things. You can get a rough estimate of the home’s worth from an appraisal, but you won’t get to know of the missing parts or damages that exist.

On the other hand, inspections provide a detailed report of any issues that you need to get fixed before the purchase or might have to deal with afterward.

Communicate Through Your Agent

There’s a significant amount of real estate jargon you need to be familiar with. There are many legally sensitive issues, interactions, and considerations as well. Consider appraisals and inspections, for example. Many buyers don’t have clear ideas about the two.

For such reasons, have your agent communicate at all points for you. Real estate agents know how to ask the right questions and make requests in ways that don’t jeopardize your best interest. That’s why it’s better not to contact the seller directly.

Moreover, you can always step into the conversation if you need to express specific concerns or requirements.

Get the Closing Costs

You don’t pay only the down payment at closing. As a buyer, you also have to cover the closing costs. Your lender is the recipient of closing costs in exchange for loan servicing. Closing costs commonly include inspection and appraisal fees, credit check fees, etc. These costs are usually limited to 3-6% of the total loan value.

You can ask the seller for concessions beyond the property price. You can even ask the seller to contribute to the closing costs if you have trouble covering them on your own. You might ask why the seller would agree to contribute to the closing costs? To close the sale as fast as possible.

Reason for Selling

The buyer needs to understand why the seller is moving or selling the place. This provides insight into the seller’s authenticity and gives you leverage in the negotiations.

Suppose the seller is moving to the new home they bought. You might get a better offer if you ask for a discount in such cases since they would want to close ASAP.

Walk Away If Needed

There are times when the seller might want to play hardball with you. They might be interested in closing the deal but don’t plan to lower the price and force you to a higher loan. You can simply make your final logical offer and walk away in such scenarios.

The idea is not to get attached to a particular home. But that seller playing hardball might get back to your offer if it was reasonable enough and they see that they’re not getting a better offer anytime soon. This also opens up the possibility of getting better homes for better deals.

Bottom Line

Negotiating for real estate deals is the same as any other transaction. However, maintain the precautionary practices and ensure you are well equipped before the agreement. There’s no reason things shouldn’t work out for you.

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