Negotiations are an integral part of the real estate experience. They can also be the most white-knuckled part of the experience. But when you go into your buyer or seller transaction, knowing exactly what you can negotiate on (and the reasoning behind it) can give you not only a leg up, but confidence during the process. Here are 10 real estate negotiation items you can leverage when buying or selling a home.
10 Real Estate Negotiation Tips
- Price – We had to include this in the list (even if some of you are thinking “no kidding Cap’n obvious!”) because this is the biggest impact item in the transaction that is negotiable. Both buyers and sellers need to keep current market conditions in mind. When negotiating price, this is where having a Realtor who is a seasoned negotiator becomes crucial.
- Closing Costs – Closing costs are typically paid by the buyer and cover things like the attorney fees, appraisal, escrow deposits for property tax and homeowners insurance, and more. Closing costs typically cost between $3,000 – $7,000. If a buyer is struggling to cover the down payment and closing costs, they may ask for sellers to pay a portion of the closing costs (sometimes referred to as concessions), and in exchange may offer a higher purchase price or other negotiable items.
- Home warranty – A home warranty covers repairs to the home’s appliances and major systems for the new homeowner. Buyers may request one or sellers may offer one to grease the wheels of negotiation.
- Financing contingency – A financing contingency lets the buyers back out of the sale if their financing falls through. In a world where cash deals are common, someone wanting a financing contingency could get passed over for a cash offer that’s more of a “sure thing.” Regardless of contingency, it will always benefit the buyer to have a mortgage pre-approval in place prior to submitting an offer on a home.
- Appraisal contingency – The appraisal contingency states that the buyer can back out of their offer if the property appraisal comes back for less than the expected amount. Buyers are typically advised to have an appraisal contingency. If the appraisal comes back lower than the negotiated purchase price, the difference between the two amounts can become a point of negotiation that the buyer is unwilling/unable to cover.
- Closing Date – Depending on their circumstances, sellers sometimes want to close as quickly as possible. As a buyer, offering a quick closing date can help sweeten your offer.
- Occupancy/No Occupancy – If the seller needs a little extra time to get into their new home once they sell their current one, the buyer may offer to allow them to remain in the home after closing for a fixed time (typically 15-90 days). This can be negotiated at a paid daily fee (per diem). Or if the buyer really wants to make their offer more attractive, they can offer free occupancy.
- Repairs and updates – It’s not unusual for a home to need a few repairs. Sellers who don’t want to deal with getting the work completed themselves can list their home “as is.” Or instead, offer fixed-amount concessions for specific items (i.e. $1,000 for carpeting). A home needing lots of repairs/updates, is a good position for the buyer to negotiate for a lower sales price.
- Home inspection – A buyer may offer to waive the inspection to speed up the closing process, but buyer beware. Skipping the home inspection is risky business. Only consider this for a home that you’d buy no matter what the inspection might find.
- Furniture and Other Stuff – Love the lamps? Crazy for the couches? There’s no harm in asking for furniture to be included with the sale of the house.
We’re here to help you ace your negotiations!
Our agents will empower you with support and guidance that makes negotiating a breeze! They’ll do the heavy lifting – you reap the rewards of a satisfying, confident transaction. Reach out to us today by clicking here and let us know how we can help you sell your home or buy your dream home now!