Negotiations are a critical part of the homebuying process and will partially determine how much you end up paying for a home. Here are some basic real estate negotiation tips for buyers:
Work with a Realtor or real estate agent
Despite the accessibility of online listings and virtual tours, the services of a real estate professional are essential to a successful home purchase. An agent is a valuable asset when it comes to making the right offer and negotiating the purchase price.
As local experts, agents have access to the most recent housing data. They are also knowledgeable on interest rates, property taxes, and property values. Having access to this kind of specialized information allows them to negotiate the best terms for buyers.
Aside from knowledge and expertise, an agent also brings objectivity to the buying process. Some buyers can get carried away during negotiations, particularly if they’re invested in the home. Agents, on the other hand, can separate their emotions from the buying process. They are in a better position to negotiate because they are not afraid of losing out on the home. Their job is to protect your interests and make sure that you don’t overpay for a home, even if it is your dream home.
Prepare financial documentation
Buyers must be ready to prove that they are qualified to make a home purchase, whether paying in cash or applying for mortgage. Sellers will want to make sure that the buyer can go through with the sale while lenders will verify their ability to make continual mortgage payments.
Those planning to secure financing for their home purchase should ideally get pre-approved for a mortgage before making an offer. The pre-approval letter is a document from a reputable lender stating the mortgage amount that the buyer can borrow. This means that there’s a high likelihood that the buyer will get approved for a mortgage and that they can afford this much home.
The pre-approval letter is often confused for a prequalification letter, which is a different document. The pre-approval letter states a more accurate estimate based on financial information that the lender has verified. When pre-qualifying buyers, on the other hand, holds less weight than pre-approval since the lender normally stops short of verifying financial information.
Research the market
Negotiations will depend largely on the amount of interest on the home, and whether it’s a buyer’s or seller’s market. There will be less elbow room for negotiations if the home is well-priced and has received multiple offers. Doing online research won’t be enough to help you understand what’s really happening on the ground. An agent will help you determine the temperature of the market as well as discuss the best strategies for negotiation.
In a seller’s market, where homes sell fast and over selling prices, buyers will need to make their offer more attractive. This could mean offering over listing price, closing the deal on the seller’s schedule, or shouldering the costs and fees associated with closing. However, when negotiating in a buyer’s market, buyers can ask the seller to make concessions, such as lowering the price or shouldering the cost of repairs.
If you’re buying in Basking Ridge, Bridgewater, Warren, and the surrounding areas, Pagnotta Homes is here to assist you. Contact them here. You can also reach the team at 908.436.7947 or info(at)pagnottahomes(dotted)com for inquiries.