In today's housing market, you have the power to negotiate your buy-sell contract, which could save you thousands of dollars and years of headaches. Your real estate agent will help you negotiate the best price and ensure that you get a home inspection so you know what's right and wrong with the house you hope to buy. Let's look at 3 negotiating strategies you can take advantage of when purchasing a home.
1. New Construction
Because mortgage interest rates are high in 2022, fewer homebuyers are looking for houses, and you have more negotiating power regarding newly constructed houses. Talk to your real estate agent about having the home builder pay for closing costs when you buy a newly built home. When the housing market softens and builders struggle to sell new homes, you have more leverage as a buyer and can negotiate to have closing costs covered possibly or other costs reduced.
When buying a new house, the builder may cover the closing costs.
2. Using Competitor Listing as Leverage
If you want to buy an existing home but feel the price is too high, compare it to other similar, recently listed homes for sale in the area and use it to your advantage. Let's say you see a lower-priced house for sale with similar square footage, similar upgrades, and in the same neighborhood where you've found another house you wish to buy.
You could save money on a home when another lower-priced home hits the market in the same neighborhood.
Because the homes are similar, talk to your agent about using the comp to offer less for the house that most interests you. For example, if the house you want to buy is $400,000 and the competitor's house is $365,000, you might offer $370,000. Your real estate agent can determine if this house is truly a great comp or if you're wasting your time trying to find a way to get a lower price on a home.
3. Inspections and Contingencies
When you're buying a house, avoid waiving home inspections and contingencies. A home inspection is critical when purchasing a home because it can reveal many high-priced problems like termite damage, outdated HVAC systems, foundation issues, and roof issues. If you buy a house without knowing these high-priced issues exist, you will pay tens of thousands of dollars to make the repairs soon after purchasing the house.
Waiving a home inspection could cost you tens of thousands of $$$ after you purchase a house.
In 2020-2021, interest rates were low, many people wanted to buy a home, and there were multiple bids on most homes for sale. Because buyers were up against multiple offers, many waived the home inspection and contingencies because they wanted their contract to be chosen by the home sellers. Now that the housing market has softened, fewer buyers are competing for the same home, and there's less of a reason to waive the inspection and contingencies.
Ask your real estate agent about negotiating any repairs outlined in the home inspection. The home seller might offer concessions to either have the repairs done before you purchase the house or credit you money towards the price of the home so you can afford to fix the repairs after moving into the house. Take advantage of your real estate agent's negotiation skills, and you may find yourself saving thousands of dollars on your home purchase.
As a homebuyer, you have more power to get what you want when buying a home in 2022 and the near future. Home builders and home sellers are more willing to negotiate because of the housing market's current state. Reach out to your real estate agent to learn more about negotiating to get more from the purchase of a home.
Reazo can help you find a local real estate agent who will share information about negotiating the purchase of a home. Please email us at firstname.lastname@example.org, and let us know where you wish to buy a house, and we'll connect you with a local real estate agent.
Take advantage of Reazo's comprehensive guide on buying a home, and bookmark it for future reference (you'll be glad you did!):