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How to Negotiate on a Home for Sale (The 3 BEST Negotiation Tactics)

1 - Do your Homework Know Your Market Price is obviously the first thing which comes to mind when we talk about negotiations on a home.nbsp; However, in order get the very best deal possible, you need first to know the fair market value of a home.nbsp; Texas is what is called a non-disclosure state.nbsp; The sale prices of homes in Texas are not displayed to the public and are only disclosed to the local MLS (assuming the property was listed on MLS).nbsp; The only way to get the true sale price of a property is through an agent who has access to the MLS.nbsp; If the home was never listed on MLS, nobody, including Realtors, will know the sales price of the property. Having a good idea of the current, fair market value of a property is the initial step in any negotiation/purchase.nbsp; Let The Seller Knownbsp;You Know The Market Negotiating begins with the presentation of an initial offer.nbsp;Merely throwing out an offer on a property without rhyme or reason is going to ultimately leave you with insufficient leverage in the negotiation by alienating sellers.nbsp;nbsp; A compelling, well-planned, detailed offer will tell your story and humanize you to the seller.nbsp; Thisnbsp;type of offer will allow the seller to be more flexible to you and not your competition. Example - we know you are asking $500,000 for the property but we feel like the carpets will need replacing and we have priced that repair at around $5,000.nbsp; Therefore this is why our offer is $495,000. Show the seller that you have done your homework, know the fair market value, and have a good idea as to what will need to be done to the property to bring it back to full market value.nbsp; A seller will have much more respect for this kind of offer as opposed to a low ball offer with zero explanation or reasoning.nbsp; The only thing a lowball offer with no reasoning will do is offend the seller and create a barrier during negotiations.nbsp; In fact, this type of lowball offer can very well kill the entire deal.nbsp; Think hard before making an offensive offer.nbsp; If you like a house and want that home, I highly suggest not making an offensive offer for the property. 2 - Get Concessions from the Seller Heres How To Get Concessions When you present the offer from a reasonable, commanding position, you lay the groundwork for the seller making some concessions on items they know need to be updated, upgraded, repaired, or replaced.nbsp; The best way to get a good deal on the home using seller concessions is to pick items any buyer will want to be fixednbsp;- i.e., flooring, roofing, drywall cracks, HVAC issues, foundation issues, etc... Cash Back Is Better Than Seller Repairs - Heres Why Sellers who stop negotiations on price will often be willing to give more on repairs.nbsp; Again, if you pick out items every buyer will want to be repaired, sellers generally cannot argue with your mindset.nbsp; Plus, by going after seller concessions on everyday things, the seller knows the same items will most likely come up in any negotiation. It is best to have a professional home inspection performed on the home and a thorough written report be issued to you, the buyer.nbsp; With a professional home inspectors recommendations, a seller is much more likely to take your requests seriously.nbsp; As, again, most sellers are reasonable enough to figure that most issues found by one inspector will most likely be found by all home inspectors. When it comes to either allowing sellers to make the requested repairs or taking cash back, the buyer should always receive cash instead of the repairs.nbsp; Buyers will never be happy with the repairs a seller will make.nbsp; Also, sellers will generally make the cheapest repairs possible.nbsp; I can promise that the quality of most seller repairs (especially those not requiring a licensed individual to make the repair) will be very low quality. Knowing this, there are several items which the seller should repair prior to you taking possession of a home.nbsp; These repairs are items where the inspector may not know the full extent of the repair needed.nbsp; Therefore, you arent sure how much cash the repair will ultimately cost.nbsp; Examples of these repairs are things like an HVAC system not working properly; a water leak; swimming pool leaking; etc.nbsp; You can see why having the seller repair these types of items prior to closing would be in your best interest.nbsp; These repairs may be a simple repair or could run into the thousands.nbsp;nbsp; *If you have a seller make a repair, always get receipts prior to closing and make sure that a licensed provider was the one who made the repair (if a license is required for the specific work - i.e. electrical, plumbing, etc.) 3 - Closing Costs Might be the Best The Hidden Price Reduction Sellers are never surprised when buyers ask for closing costs.nbsp; However, from a psychological standpoint, Ive seen sellers almost ignore the fact that a buyer is asking for closing costs so long as the buyer has offered a solid, overall price.nbsp; Similar to the concessions, closing costs allow the savviest buyers to negotiate a better price by minimizing the cash they have to bring to closing. A ton of my clients would rather negotiate through closing costs because it allows them to save their cash for repairs and renovations after closing.nbsp; I cannot tell you how many of my clients will have work they want to do to a house after we close - redo bathrooms, kitchens, build pools, build additions and more.nbsp; If cash is tight, be sure to keep the closing costs in mind. Know The Guidelines amp; Limits It is important to know mortgage loan regulations.nbsp; There are limits as to how much a buyer can receive in closing costs from the seller.nbsp; Talk with your lender prior to making an offer because he or she will be able to educate you on the amount you can receive in closing costs based on the loan product you are using. For example, FHA guidelines currently state that a seller can only pay up to 6 of the sale price toward the buyers closing costs.nbsp; Be sure you dont negotiate a deal only to have the lender disapprove the deal. An excellent negotiator can assist you in buying under market value in many cases while a poor negotiator can cost you thousands



This post first appeared on Dallas Real Estate, please read the originial post: here

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How to Negotiate on a Home for Sale (The 3 BEST Negotiation Tactics)

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