Buying A Home Home Loans

6 Smart Negotiation Tips For First-Time Home Buyers

Written by Rebecca Lake

You’ve spent months looking at listings and then one day, you find it: the perfect home in the perfect neighborhood. Problem is, there’s just one catch–the asking price is outside your budget range. While you could just move on, you shouldn’t count yourself out until you’ve flexed your negotiating muscles. Haggling over a home isn’t always easy, but it can be worth it when done properly. If it’s your first time jumping into the home-buying rodeo, here are some tips for becoming a master negotiator.

1. Take The Temperature of the Market

Before you attempt to negotiate anything, you need to know what kind of position you’re starting from. Negotiating in a buyer’s market is very different from wrangling a deal in a seller’s market. If the odds are in favor of the seller, for instance, you’re going to have less wiggle room when it comes to snagging a home below asking price. On the other hand, if homes are selling at a slower pace in the area you’re buying in, that can give you a little more leverage at the bargaining table.

2. Base Your Offer On The Home’s Value, Not The Sale Price

What a home is worth and what it sells for are two separate things and you need to know the difference before you make an offer. If you don’t mind spending a few bucks out of pocket, you can request an independent appraisal first to make sure what the seller is asking matches the home’s value. It’s also a good idea to look at the home’s history to see how many times it’s been on the market, how it’s value has changed over time and what it’s sold for in the past.

3. Know What Your Sticking Points Are

Virtually anything is up for negotiation during a home sale, but you have to be clear on what you are and aren’t willing to compromise. If, for example, you want the seller to pay a certain amount towards closing costs but you also want them to make some expensive repairs, you may be forced to decide which one matters more if they decide to play hardball. Having a short list of things you don’t want to budge on and a longer list of things that are flexible ups the odds of getting (most) of what you want.

About the author

Rebecca Lake

Rebecca Lake is a personal finance writer and blogger specializing in topics related to mortgages, retirement and business credit. Her work has appeared in a variety of outlets around the web, including Smart Asset and Money Crashers. You can find her on Twitter at @seemomwrite or her website, RebeccaLake.net.

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