proposal to the seller (if FSBO) or seller’s agent. The seller’s agent will either accept it, or present you a counteroffer. Negotiations will go back and forth until you settle and reach an agreement. After that, the home buying will move into the escrow.
NEGOTIATING THE PRICE: WHICH TACTICS TO USE
The goal of your negotiation is to buy a house for money you are willing to pay, and if you get it for less then you were willing to pay, you have exceeded your goal. Decide upon the highest maximum amount that you can afford, and do not ever offer more. If you pay more than your maximum amount, you have already lost. Depending on what kind of market you are in, strategy and tactics will vary. In a buyer’s market (i.e., there are more houses on the market than buyers looking), you have more possibilities to succeed. You can make a less-than-reasonable offer, demand for some house improvements, a better closing date, and even closing fee payment by the owner. In a seller’s market (i.e., there are fewer houses available, with more people looking than selling), you have less leverage, as you are not the only one in line. You are most likely to succeed by offering a seller’s price, no request for closing costs, nor residential service contract (home warranty). Your REALTOR® will inform you of various approaches to allow for your strongest offer. Remember, if they do not get it from you, they will easily receive another offer soon from someone else. It is a good idea to find the reasons that the owners are selling the house (if possible). Do they want to sell it because they are moving for a new job? Are they moving soon and thus “motivated sellers?” Has the property price been reduced due to an extensive time on the market?
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