In the United States, we’re not used to negotiating a price for our every day purchases. But when you’re buying a home, not negotiating the sellers’ asking price may mean paying more than the home’s fair market value. To avoid feeling that you paid too much, you must learn the art of give and take for a successful purchase price.
For example, you may find your dream house with an asking price of $112,000. Your real estate agent tells you that comparable homes in the area sold in the last six months for $100,000 to $110,000, so you make an offer of $100,000. Before formally presenting the offer to the sellers, your real estate attorney or agent prepares a contract, writing in the appropriate contingencies, including the condition that all appliances and light fixtures remain in the home.
Within a few days, you receive a counter-offer of $110,000 with the seller’s contingency that you submit a pre-approval letter from your lender. After a few more rounds, the seller finally agrees to come down to $105,000 if you move the closing day from four weeks to six weeks to allow their kids to finish school.
Because you need to close in four weeks, you offer to let the sellers rent the house from you for two weeks after closing. The sellers accept. Finally, you have a deal!
Remember, the goal is not to crush the seller by getting everything your way. It is about getting your dream house at a fair price. And negotiations always involve a little compromise and give and take.