How To Negotiate The Best Price With a Realtor

Buying a house can be challenging. It might look easy on the surface, but getting into the act of purchasing your domicile can be fraught with a lot of obstacles and frustration. Finding a house that you like might be easy, but the real challenge begins when you submit an offer. In an ideal situation, you expect your bid to be accepted, but this does not always happen. The seller of the house you are interested in has his personal goals. On seeing your offer, he can respond with a counteroffer. At this stage, you have to start negotiating. If you are not a skilled negotiator, you stand the risk of losing the bid you placed on the house. Not only that, you can pressure yourself into making terrible decisions that will haunt you later on. Hence, you must take due caution during the negotiation process. To save yourself from unnecessary regrets, you should get a Realtor or a registered real estate agent to assist you. Finding a realtor is not hard. If you live in Franklin, Tennessee, you can run a search in your browser for top realtors in Franklin TN and make a choice based on the search results.

Why Do You Need a Realtor?

A Realtor is an individual who serves as a middleman between you and the seller. A professional Realtor is an ideal person to assist you in getting the house of your dreams. A Realtor has sufficient knowledge of the local market and its dynamics. He or she also has your interests at heart and can help you get what you want. Getting a house can be an emotional process, and you don't want to make decisions based on how you feel. Having a Realtor to help you in making cool-headed decisions that will be to your benefit is paramount. It is tempting to want to go through the negotiation process alone but doing that can hurt you in the long run. Getting a Realtor will help you in going through the buying process without much difficulty.

Proving Your Finances

It will be ludicrous for you to bid for a house without proving to your seller that you can cover the payments. Placing a bid for a home without convincing the seller you can pay will end up in your offer getting ignored. To prove to your seller that you have the available finance to pay, you need to submit a pre-approval letter. A pre-approval letter is a document that shows the amount your mortgage lender has approved of you to borrow. Your lender will issue you this document and show you the loan amount you are eligible to receive. The letter is proof of your financial ability to both your Realtor and the seller of the house.

Understand The Market

No one wants to buy an expensive house. Everyone wants a domicile that is cheap and yet in good condition. As a result, you might tend to bid low to see if, by some stroke of luck, you can get the house you desire. Well, the price at which you get an apartment depends on the local market. Hence, having a Realtor is vital. Your Realtor should be able to study the market and understand what is going on. He or she should also be able to inform you if the market is balanced or dictated by either buyers or sellers.

Seller’s Market

A buyer dominated market consists of high buying pressure and little selling pressure. In this market, there are a lot of buyers looking to get a house compared to the number of apartments available for sale. As a result, the sellers have the upper hand. You and your Realtor will have to tread with caution in this market. Asking for too much can result in the seller neglecting your offer and moving on to another interested party. The sellers, seeing their advantage, want to maximize their opportunity as they realize a lot of people are looking to get a house. Due to this, they look down on offers that do not favor them and pick offers that will be of great benefit to them. A professional Realtor should be able to know how to approach sellers in this market on your behalf. You might not get the discount that you want in this market, but a professional real estate agent can strike a valuable deal for you.

Buyer’s Market

In a seller dominated market, the selling pressure is higher than the buying pressure. The result is that there are more houses for sale compared to the available buyers. Hence, the balance tilts to favor the buyers and gives them the upper hand. Smart buyers can get a massive bargain in this market if they know how to play the game. Sellers in this market type are aware they are at a disadvantage. As a result, they are more willing to make a lot of concessions to the request of a buyer. Having an experienced Realtor in this market situation will be of great benefit to you. A real estate agent adroit at what he does should be able to table an offer that will give you the maximal benefit.

Balanced Market

A balanced market is another kind of market that has its intricacies. In this market, the buying and selling pressure is roughly equal; the number of available buyers to that of the sellers is on par. This market is a delicate one and events are slower as no one is eager to sell or buy. This apathy means you should be careful when placing your offers so that you don't miss out on a good deal.

Things You Can Negotiate on When Buying a Home

When buying a home, there are several things you and your Realtor can negotiate on that will be to your advantage. Asking for these things does not guarantee the seller's concession. So, you should be ready to take a 'No' and know the next step to take if the seller does not consider your request.

Negotiate for Payment of Mortgage Loan Points

Mortgage points are costs you pay to your lender for you to have a reduction in your mortgage interest rate. You and your Realtor can try and negotiate with the seller to pay your mortgage points. If the seller does that, it helps in reducing his or her tax payments and reduces your mortgage rates. Your Realtor will assist you in making this request based on the market situation and the seller's demands.

Negotiate For Payment of Closing Costs

Closing costs represent the amount you pay to your lender for offering you a loan to purchase a house. This amount can cost about 2-6% of the purchase price of the building and includes fees such as appraisal costs, inspection costs, and credit check costs. If you are having trouble paying up your closing costs, you and your Realtor can work together in convincing the seller to cover the payment.

Negotiate For a Home Warranty

A Home Warranty is a plan that covers the cost of repairing various home appliances such as plumbing systems, HVAC systems, and electrical devices. You and your Realtor can convince the seller to pay the insurance home warranty plan for one year. The cost of a home warranty should be about $600 and can be a good thing to negotiate for if you so desire.

Negotiate a Flexible Move-in Date

If you are not so eager to move into a new house, you can negotiate a flexible date for you to move in. This negotiation can work effectively if your Realtor does detailed research on the seller. The investigation might reveal that the seller does not want to move out immediately. Hence, you can seize the opportunity to propose an offer based on a flexible day for you to move in. The seller can find this offer attractive and accept your bid. Your Realtor can also propose an agreement whereby the seller pays rent for staying in the house a particular amount of time after the closing date.

Negotiate For House furniture

Another negotiation strategy you and your Realtor can employ is to offer to buy the household furniture alongside an increase in the purchase price. The seller might find it attractive and accept it. If the seller refuses the offer, you can let it go and attempt other negotiation options that would most likely work to your benefit and win you the bid.

Conclusion

Locating and buying a house is not an easy process. It takes a lot of grit and determination to go through with it. Nevertheless, there are times you have to back out. If your Realtor suggests you walk away from a deal, you should do so. Not every deal is worth it. It will be foolish to invest in a house whilst struggling to pay up your mortgage loan. If you can hire a Realtor and follow the instructions above, you are bound to work out a good deal and get the house of your dreams.

Michael Kelly is a Freelancer Writer, Entrepreneur and passionate blogger. A writer by day and a reader by night.