09.20.2010 / The Art of Negotiation: Tips for Home Buyers
With interest rates at a record low, you may be jumping into the market for the first time without knowing that you can negotiate your way to a better deal. In the market today, anyone can be a savvy negotiator with a few tips. Whether you have your sights set on incentives, price reductions, style upgrades or a quick move in, these tactics can help you get the house of your dreams at the right price.
"These tactics can help you get the house of your dreams at the right price."
Tip 1: Set boundaries.
First, decide how badly you want the home in question. Write down any terms you must respect to make ownership possible and explain your limits to the seller or agent, and be clear about which issues are not debatable. For instance, pick a ceiling price you won’t go over and stick to it. (It’s important to talk to your realtor about this in advance of making an offer.)
Tip 2: Know who you’re dealing with.
By finding out as much as you can about the seller and their motivations, you can use the information to your advantage during negotiations. For example, if the homeowner is in a hurry to move due to a job transfer or already has money down on a new home, they may be more likely to accept a below-listing price offer since selling the house is a priority.
Tip 3: Prioritize, then compromise.
Make a list of the terms you seek, in order of importance. Then see if you can compromise on the less crucial issues in order to make the top priorities a reality. For example, if you’re anxious to get into a new home, you could agree to an incremental price increase if a short closing period is guaranteed.
Tip 4: Know when to say no.
To negotiate successfully, you must have patience and be willing to walk away. Remember, there are always other homes out there if the terms are beyond your comfort zone.
Tip 5: Ask for advice.
Ask friends and family members – especially those seasoned in home buying - to share their negotiation strategies. However, make sure their advice works for you. You should also trust your own instincts, stand your ground on important issues and be willing to compromise on the not-so vital points.
Tip 6: Connect with the seller.
Owners want to sell their home to someone they trust. Let sellers know you are sincerely interested and have been pre-qualified for a loan. Getting pre-qualified is important because it will help determine how much you can borrow and what type of loan will best fit your lifestyle. Your realtor will be able to show you homes in your price range and sellers will feel more confident in negotiating a price.
Do you have any tips for negotiating home ownership? Let us know!
Securing a great rate on a home loan can give you some wiggle room when negotiating price. For information on First National Bank’s mortgage loan options or to start your pre-qualification process, contact a First National Bank Mortgage Specialist at 402-602-5300 or 877-687-5626. Also, check out our Online Mortgage Center at www.firstnational.com/mortgage for more helpful resources.