Somewhere towards the middle of the tediously long process of buying a house, comes the part where you will have to negotiate the price of the property. For a seller, the task is to force back and neutralize every estate negotiation. On the other hand, the simple guiding philosophy for a buyer generally is to ask, ask and ask some more. It’s natural, therefore, that a tug of war-like situation will ensue and negotiations will have to take place.
If you are looking to buy a property in Orlando Florida, the house buying negotiation guide below will help you close favorable deals.
As mentioned earlier, the seller wants a good deal. Naturally, they will keep a margin that allows them to maximize their profit. Always do your due diligence, review comparable sales before you quote an offer. The research will help you figure out the true market value for that particular property.
2. Compare the Comps with the Target House
You have to figure out how the home you are considering measures up to other similar properties sold recently in the area. For example, the house may be in the same locality, may be the same type/model and may even be in the same subdivision. But it could also have additional amenities such as a pool in the backyard or a mini theatre in the basement. Your buying agent will come in handy since they have a much better knowledge of all the similar properties in the area.
3. Submit Your Offer and Include the Comparable Sales
“Purchase agreement” or the “contract”, as the estate agent will call it, should include the comparable sales data to convey to the seller that your research is solid. This will make the seller more likely to accept your offer and keep them from over-charging you.
And if they try, you can always refer back to the comparable sales data to support your side of the argument during the negotiations.
4. Expect 3 Possible Scenarios
Your offer is accepted.
Offer is rejected without a counter-proposal.
You get a counter offer from the seller.
There’s not much to be done in the first and second scenario. But in case the third scenario comes alive, it means the negotiations are on.
5. Decide On a Maximum Amount in Your Head
The amount in your head should be reached after considering the comparable sales and it should be reflective of the true market value of the house at that moment. If not, you will have negative equity from day 1 or even have trouble when it comes to the lender’s appraisal.
This will also be determined by a pre-approved mortgage. So you can’t quote $300,000 if you’ve been pre-approved for $280,000.
6. Home Warranty
Push for a warranty during negotiations if you believe there might be repairs that will show themselves later. This piece of paper will give you the peace of mind and not to mention the free house repairs.
7. Don’t Nickel and Dime Either
Say the negotiations might have come to be stuck at $270,000. Comparable sales and your calculations put it closer to 265,000. Ask yourself how bad do you want this house? Will it appraise for $270,000? And whether or not you have the budget? Go for it if you can answer “yes” to these questions.
8. Understand the Market you’re In
Whether it’s a buyer or a seller’s market? If it’s a market where houses sell really quickly, the buyer will have to be very cautious with the counteroffer by the seller.
9. Have Everything Written Down in the Contract
There’s no value of the spoken word in the real estate business. So make sure that all your conditions and agreements are penned down and nothing is left to the goodwill of the seller to honor his words.
10. Know When to Walk Away
If the seller won’t budge and you know, from your own research and comparable sales data, that he’s overcharging, it’s probably time to walk away.
All in all, keeping the negotiation guidelines in mind will help you a great deal when buying your property. If you’re looking to buy or sell property anywhere in Orlando Florida, Megan Dowdy Realty is here to help.