So you’ve found the home of your family’s dreams, and just have to have it! First thing to do? Take a deep breath and understand that your excitement may hurt you in your negotiations with the seller.
As a buyer who just fell in love with a home that will likely be the most expensive thing you ever buy, it’s critical to start off on the right foot. Your ultimate buying price will determine how happy you are with your purchase, so start with some simple ground rules. Here are five that may help:
- The more willing you are to walk away, the better deal you’ll likely get. Many buyers approach the offer with a bit of desperation because they don’t want to lose the house. Instead, find the right price for you. Don’t offer too high and out of your comfort zone and don’t offer too low and risk losing the house. Determine beforehand the highest price you would be willing to negotiate to, and when the talks go beyond that, walk away.
- Offer slightly less than your maximum price. This will enable you to counter a rejection from the seller of your first offer. As long as you stick to what you can afford and leave yourself room to move your offer up in response to the seller’s counter, you’ll be in good shape.
- Make a reasonable offer. Every buyer wants the dream deal, getting exactly what you want and paying less than you ever imagined. Yet, lowball offers often insult the seller and turn them against you; and in the DC market, they have plenty of other options. You have to make a realistic offer. There’s a balance between what you can afford, what you want to get and what’s reasonable given the market and neighborhood.
- Know the neighborhood. Knowing what similar homes were listed at and sold for is critical to making a sensible offer. Are homes selling for asking price? Are there multiple offers? If you’ve got a situation where there’s a high demand for a particular house and area, you’re offer may have to reflect that.
- Identify the things that are wrong or that you want to change about the house. You’ll be spending money when you first move in so make sure you go into the offer with that knowledge. The term ‘House Poor’ comes from folks that offer the max, get the house and can’t afford to furnish the rooms.