How To Negotiate as a Home Buyer

How to Negotiate the Best Deal

Negotiating well is not about being aggressive. It is about preparation, presentation and knowing which lever to pull at which moment.

1. Know Your Market.

   Let's face it, in order to get the best deal possible you need to know the market value. A savvy buyer and professional agent are going to be market experts. They will be able to identify what market value is and then negotiate to get Better than market value.

   Start with the backdrop: supply and demand tells you whose market you are in, and identifying value tells you what this property is actually worth.

2. Present Your Knowledge to the Seller.

   Negotiating begins with the presentation of the offer. Simply submitting an offer on a property with no "setup" is going to leave you with limited leverage in the negotiation. You could also be perceived as trying to take advantage of the seller.

   A powerful offer presentation will tell your story and humanize you to the seller which allows them to be more flexible for YOU and not your competition.

3. Let Them Know You Love Their Home...But.

   In order to negotiate the BEST price you have to bring the seller to a realistic price point. The seller knows you like the property because you put in an offer. It's imperative you remind them of the shortcomings you're willing to overlook, as long as the value proposition is present.

   They will recognize you are buying a property you like, but it also has to make financial sense.

4. Obtain and Maintain Leverage During Negotiations.

   In every negotiation there is a point at which leverage can shift. Learn the strategies that will allow it to shift in your favor and you can negotiate with tough sellers to get the best price.

   Leverage comes from position, not volume: your financing strength, your flexibility on timing, and your willingness to walk away. In Myrtle Beach, flexibility on the closing date is often worth real money to a seller coordinating their own move.

5. It Starts With the Presentation.

   When you set up the offer with a powerful presentation you have laid the groundwork for the seller to make some concessions on items that may need to be updated, upgraded, repaired, or replaced.

6. Changes vs Cash Back.

   Once you are close to the price you are comfortable with for purchasing the property, you can refer back to those items. Most sellers know there are items not every buyer will want in their home.

   Sellers who stop negotiating on price will often be willing to make concessions on repairs, or similar items they realize may come up in future negotiations.

7. The Surefire Price Reduction.

   Sellers are typically not surprised when a buyer asks for closing costs to be covered. Similar to concessions on repairs, closing costs offer an avenue for the buyer to negotiate a better price by minimizing the cash they need to bring to the closing table.

   Closing costs are a great negotiating tool, whether you need them or not, as long as you know how to present the offer.

8. Know the Guidelines and Limits.

   It's important to know the rules. There are limits to what you can and cannot ask for when purchasing a home. This depends on many factors including how you are financing the purchase.

   Financed purchases cap seller concessions, and the ceiling varies by loan type and down payment. Ask your agent or mortgage broker if you have any questions or would like to discuss the options in more detail.

9. The Biggest Closing Cost Mistake.

   Avoid asking for closing costs on cash deals. Some would argue that it makes the seller feel like they are getting a higher price. Just like the buyer, the seller should only be concerned with their net sales price.

   Sellers can become confused and feel manipulated if closing costs are requested on cash deals. This confusion can lead to a breakdown in negotiations — and it matters more here than in most markets, because a large share of Myrtle Beach condo and second-home purchases are cash.

10. Team With A Professional Agent.

    A great negotiator can help you buy under market value in many cases. A poor negotiator can cost you thousands!

    Negotiation is also about knowing the other side. A local agent often knows the listing agent, how their sellers have been responding to offers, and what the property's real history is — none of which shows up in the listing.