When looking for a new house, it’s fairly standard for people to set a budget, and then to essentially deliberately break that budget and choose to view properties that are more expensive than originally indicated as suitable. While this may sound like a very strange process, it’s actually outright recommended by property experts.
The reason that the above tactic can be effective is due to the potential for negotiation that is involved in any house purchase. A price at which a property is advertised is rarely the price that a seller will accept; and, in fact, many sellers artificially inflate their asking price, in the anticipation that potential buyers will look to negotiate anyway. Essentially, it’s a kind of dance between the buyer and the seller, both looking to achieve their version of the “best price” for the sale.
As a buyer, your best price will always be to ensure that a property you are interested in is as low-priced as possible – so you’ll need to master the art of negotiation. Here are a few tips that may help you in this regard.
#1 – Avoid low-balling
Low-balling is poor negotiation tactic; it suggests a bad faith effort, and can even be interpreted as insulting by the seller. While you’ll naturally want to get the best deal you can, offering significantly less than the asking price will always sour a negotiation, so keep offers reasonable.
#2 – Use the findings of an inspection to influence your offer prices
Ask the seller if the property can undergo a real estate inspection to identify any necessary renovation or improvement work. If the inspection unveils particular issues, then you can offer a lower price using the inspection’s findings as a justification for this.
#3 – Do background research for the area
If possible, research the prices that other properties nearby have sold for. If you find that your seller is asking far more than the neighborhood price, then you can offer a lower price on the basis that very similar properties have sold for less.
#4 – Emphasize advantages to the seller
Sellers are more likely to respond positively to offers if there are advantages to accepting your offer. For example, if you do not have a chain, then this will be undeniably attractive to buyers, so ensure they are aware of it when considering your offer.
#5 – Keep searching for other properties
If you’ve found a property that you want to make an offer on, then it’s tempting to pause looking for other properties in the hopes of securing a good price. However, this can mean that if the seller rejects your offer (and then subsequently rejects any counter offers) that you have few other options to pursue, which might lead to you making a higher offer than you’re really comfortable with. Keep viewing properties so you can keep your options open.
Negotiating a lower price on a new home is rarely easy, but it’s absolutely worth doing. Hopefully the above advice will ensure you’re able to lower the price of the property of your dreams and secure a truly fantastic deal.