a home - now it's time to get the best deal you can.
The offer is the first step in negotiating the purchase of your new
home. Try to consider all of the relevant facts when determining your
offering price. Homes often sell for negotiated figures that are below
the asking price - sometimes considerably below, so give serious consideration
to your initial offer.
Home pricing and sales activity is strongly affected by the strength
of the underlying market. In a weak market purchasers may be able to
negotiate substantial reductions from asking prices. Conversely, it
is risky to make a low offer in a strong market - another buyer may
appear suddenly and pay full price.
the Specifics of the Property
Does the home suffer from a lack of curb appeal or other problems?
If so, you may want to be more aggressive in your negotiations - chances
are there will be less competition, even in a strong market. If the
house needs renovations or repairs make
sure you know exactly what to expect so you don't have any unanticipated
expenses after closing.
Badly Do You Want the House?
Will you (or your family) be extremely disappointed if you lose
the house? If so, consider being less aggressive in your negotiations
- especially in a strong market. Conversely, if you are willing to take
a chance you may be able to get a better deal.
the Seller's Motivation
A homeowner who is under pressure to make a sale is more likely to accept
a low offer. Recognizing a motivated seller is a major step toward making
an advantageous purchase. Common causes of pressure on a seller include
financial difficulties, divorce, or the need to move by a certain date.
with Your Agent
Your realtor is an experienced professional with deep knowledge of the
local market, so make the most of this resource. Your agent can tell
you how long a home has been on the market and can provide comparable
sales for review. It's even possible that your agent may know of a motivated
You Buying a New Home?
Many builders have a general policy of not negotiating prices (particularly
in major developments), so if you are buying a new house you may have
to pay full price. Nevertheless, you may be able to get a deal occasionally
- particularly if the market is weak or sales in the project are slow.
You have little to lose by trying.
An offer can be in the form of either a letter or an actual purchase
contract (the preferred format when working with an agent). Whichever
format you choose, make sure that you clearly specify all of the
required information and terms in the offer. If you are pre-qualified
for a mortgage, offer to provide a copy of your approval letter to strengthen
Instead of accepting your initial offer the seller will probably respond
with a counter-offer. After reviewing the counter-offer you are essentially
back to the beginning of the offer process - but with a better idea
of the seller's negotiability. Consider all of the information and decide
if you are willing to increase your price. This offer and counter-offer
phase of the negotiation is often done verbally - through the agents
or even at a meeting of buyer and seller - with revised contracts signed
after price and terms are accepted by both parties.
to this page since March 30, 2004