Knowledge is power, and you want to hold the power in the negotiations. Hiding the fact that you’ve taken the time to study comps, or not even bothering to do your homework ahead of time, can not only weaken your bargaining position during the negotiation process, but can also cost you in the end, whether that means paying more for the home you want or walking away from a potential sale. Don’t: Leave yourself vulnerable. Nothing shows “vulnerable” or “weak” like someone who is unprepared. If you come emptyhanded and don’t seem to know anything about the market, about comparable home sales, about the property’s condition and history, then you’ll seem like an easy target to the seller and their agent and could be taken advantage of, leaving the ball in the seller’s court. Do: Make your first offer your best offer. Part of making your first offer the best offer involves doing your research on several comparable home sales in the area, as well as the conditions of these properties. It also involves strategizing with your real estate agent on the amount you will be offering, which involves a significant amount of advance preparation and analysis. Look at it from the angle of using your own knowledge and factors in arriving at your offer, rather than merely “responding” to the seller’s listing price. The two perspectives aren’t necessarily related. One critical component to include in making your first offer the best offer is having a Comparative Market Analysis (CMA) done, which your real estate agent can provide for you. A CMA is a mathematical model used to determine the value of a target home. It calculates basic conditions (number of bedrooms, number of bathrooms, existence or size of yard, existence or size of garage, etc.), and then compares the prospective home to similar homes currently on the market in your area. This will give an idea of the local/nearby average home asking price, which is 219
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