Negotiating Tips for Buyers

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     Negotiating with a seller is not odd or strange, it is actually a normal part of most property sales.  It is a form of dialog between buyer and seller to see if the two sides can come to agreeable terms.  In most cases the negotiations involve give and take between both parties.

     In some situations, buyers should not put all of their chips on the table at the beginning of a negotiation.  There are many things that influence a sale other than price, try to find out what the seller may want.  For example a seller may want to keep appliances and they may want a closing date as soon as possible.  You can use these bargaining chips in your favor: you could then make a first offer lower than the asking price but to include the appliances in the sale with a closing date 90 days out.  If the seller does not accept this offer, they may counter-offer to accept the price but ask for a closing date 30 days out.  Or, the seller may accept the lower price but they may not include the appliances. In both cases there was give and take, in the end, both scenarios help the buyer.

     There are times that negotiations may need to go in another direction.  If a property is excellent, priced below market value, and has a lot of immediate attention from potential buyers, you may want to make an offer slightly higher than the asking price without a lot of contingencies.  In this type of situation a seller may get several offers right away and most sellers will accept the highest price with the least amount of red tape and/or contingencies.

     It is important to be fair when making an offer.  An initial ‘low-ball’ offer, far below market value, may insult a seller.  If this happens, they may not be willing to work out a deal and you could lose your opportunity to purchase the property.

     Try to find things that can give you leverage during the negotiation process.  Make notes of things that are in need of repair and/or have a home inspection completed.  You can use faults in a property to your advantage when negotiating.

     One overlooked tip when making an offer is to give the seller multiple choices based on your situation, and to explain your reasoning.  Example: if a home is fairly priced at $200,000; you have no appliances and you are locked into your rental for another 4 months at $1000 per month. You could then give the seller four offers with a full explanation of your situation:
Offer #1: $198,000 selling price with a 120 day closing (this allows you $2000 for appliances and you do not have to try and pay a mortgage and rent at the same time)
Offer #2: $200,000 selling price, appliances to stay, and 120 day closing.
Offer #3: $195,000 selling price, no appliances and 30 day closing (this allows you to make up for your cost to rent the additional 3 months and allows $2000 toward appliances)
Offer #4: $197,000 selling price, appliances to stay, and 30 day closing.

     This allows the seller to pick a scenario that is best for them.  Any acepted offer would be satisfactory for the buyer.

     Preplan and remain firm.  Investigate the property as much as possible, you may find a flaw that could give you more leverage while negotiating.  Study your financial situation and know the top price you will pay for the property.  As mentioned above, sometimes it is best for a buyer to keep back an important bargaining chip until it is actually required (many times this bargaining chip is the highest price you will pay).  If negotiations stall, you may want to put this final price on the table and let the seller know that you are willing to walk away from the deal if it is not accepted.

     Have an open mind and think ‘outside of the box’.  Almost every part of a sales agreement is negotiable, not just the price.  You may find something that helps the seller and gives you leverage in the negotiation.












*The information provided is only the opinion of Midwest Home Tour and its respective owners or employees. It is advised to seek professional advice regarding any real estate matter.