5 Things To Negotiate When You Buy Your First House
Most first-time home buyers leave it all to their realtor or real estate agent when it comes to negotiating the first home purchase. That saves you time. Nonetheless, a DIY approach can offer great opportunities to bargain with the seller on certain aspects. Besides, the worst thing they [seller] can opt for is declining to offer discounts. But you may never learn about that unless you ask.
When home buyers decide to depend on their real estate agents, they forget that the only drive pushing the agent is to get the deal done, but not to strike the best deal for their clients. Thus, they can’t get involved proactively or creatively in the negotiation.
This article discusses some aspects of the home-purchase process you should negotiate on.
The price factor is perhaps the first thing that buyers give credence when the time to negotiate comes.
If you love the property you’ve toured, when it comes to submitting an offer, offer a lower price. The seller may accept, reject or counter your offer – in which case they will have reduced the original asking price.
With the current high interest on mortgages, buyers find it hard to find a mortgage company willing to lower their interest rates. However, by partnering with a seller, you can negotiate lower interest rates after gauging the trending market interest rates. New home buyers can quickly check a mortgage calculator to understand the trending interest rates.
When you embark on a new home purchase, always ask for a premium of home warranty that covers an entire year. This is an amount that the seller should pay upfront ($450-$600). The buyer is then responsible for the deductibles with each claim.
An advantage of a homeowner’s warranty is that it cushions you from incurring expenses in the future because it covers major home fixtures like the plumbing ad HVAC systems among others. At times, the seller may not find the need for the warranty if s/he deems it unnecessary. You can then have the chance to leverage and flexibility to decline the offer entirely or opt to fix the problem for good.
Even so, when it narrows down to safety, always negotiate on areas that touch on that. That may include ground-fault circuit interrupts, or unsecured railings. These are small issues but because they may cause serious problems, it is worth taking time to work on such issues.
#3. Closing Date
You can either speed up or stretch the closing date. If you are in a in a hurry to move in, negotiating for a sooner closing date is easy. If the seller can’t afford to move out when you need them to, you can as well suggest a later closing date, but you can negotiate on storage space for your belongings. Alternatively, you can rent the property for a number of months as you find a significant down payment. As long as the cash keeps rolling in, the seller won’t mind.
#4. Think Over Commitment
It is understandable to tread with caution especially when it involves a huge investment such as a home. However, sometimes thinking too much over a purchase can be costly.
A case in point is a buyer who offered a counter price and promised to close the deal within the standard 3-day validation. The buyer took too long to come to a decision even though the property was located in a popular community. When he came up with the offer, he was surprised to learn that the property was sold to the highest bidder because it had received multiple offers. However, by committing yourself with a reasonable down payment, the seller may just consider your offer.
#5. Closing Costs
Typically, the buyer pays the closing costs. Albeit it may be difficult to get the seller to cater for the cost, most are compelled to incline to that request because it is a buyer’s market. Sellers are keen to offer help whenever they can.
Negotiating for as home is a win-win situation especially when you have a specific purpose for the negotiation.
Buying your first home is an exciting yet daunting endeavour. Apart from setting a certain budget, visiting properties and comparing neighbourhoods you will also need to explore what kind of mortgage options exist and take advice from friends or family, who are not first-time buyers in order to find out what they wish they’d known before buying their first house.