How to Negotiate House Prices
Negotiating house prices is stressful. Whether you are a buyer or seller, there’s a balancing act that needs to be achieved. And there are two factors you have to balance when working through the entire sales process, it’s emotions and financial needs.
Learning how to negotiate buying or selling a house means you need to be sympathetic but firm as well; you don’t want to be a pushover. It’s really an art form.
Finding out precisely what your bargaining chips are and how to use them can give you that edge when planning on how to negotiate a house’s selling price.
So, let’s find out what skills you need to hone in on when answering how much you can negotiate on a house.
Know the prices in the area
Not preparing is preparing to fail. The same is true when it comes to negotiating for a home’s price. Even the smallest generalization can throw a property negotiation out the window.
Make sure to order a real estate sales report from the last 90 days for the surrounding area. If you have an estate agent on your side, you can call on them for help and insights, but if you are selling your house without a realtor, make sure to access and download the data.
Price
When thinking about how to negotiate a house’s price, the asking price is just a general suggestion. Most homes don’t sell for the asking price.
This being said, even with this flexibility on pricing, how vastly this price fluctuates depends on the deal brought to the negotiating table.
For cash buyers, those making a cash offer on your home will have more negotiating power. Cash buyers are not reliant on banks, and the seller can access this capital immediately. This is the simplest and fastest method of selling a home as there are no additional procedures to follow.
But with buyers who have gone to a bank to finance the house, there’s less room for negotiating as it's not their (the buyer’s) cash they’re bargaining with. And in some cases, their own relationships with financial institutions may even sour.
This could be for several reasons. But the truth is, there are different prices for a home, and they all come with their own distinct issues.
Be ready to discuss the details
With any negotiation, there are always two conflicting parties—each with a completely different goal. One wants a high return, while the other is looking to get as low a price on the house as possible.
If you are wondering how to negotiate a house’s price from a buyer's perspective, it’s looking at the house’s details. While you shouldn’t go overboard and completely slate the entire home, pointing out apparent flaws is an excellent place to start. An example is stating that the kitchen is too small or that you believe that the bathroom is a bit dated.
For those looking at selling their homes, this can be a sore topic due to budget, the inability to address specific jobs around the house, and the unattractive fittings to the seller’s personal taste. No one likes to be told their decor or style tastes aren’t to someone else’s standards.
It is unlikely you’ll be able to sell your home as-is, without major contingencies to the purchase contract.
As a rule of thumb, which can be applied to negotiating any deal, never appear too keen. No matter how much you’re in love with the house or desperate to sell your house fast, never show how truly enthusiastic you are, as it will give negotiating power to the other party.
But if you play it cool and reach a middle ground when planning that purchase contract, it’s in both sides' interest that the contractual agreement has as few contingencies in it as possible.
You can avoid this by selling your house for cash to House Buyers of America.
Little to no contingencies
As we’ve discussed, there are many details to consider when contemplating the question of how to negotiate a house’s price(s).
For a price on a home to seem attractive for both sides, there needs to be the least amount of attached contingencies to the deal. The more you have, the more likely your deal is going to fall through.
This being said, there are very few home deals without them. To ensure that the deal is successful, you need to outline every contingency in the purchase contract, and each party must agree upon those details.
If a contractual agreement cannot be reached, you need to include a cancellation clause in the contract so that both parties can walk away from the deal. But this is a result that no one wants to reach, as both parties are interested in fulfilling their end of the deal.
However, contingencies exist for a reason, which protects both parties from entering a deal that’s bad for them.
For example, waiving the appraisal contingency means that the seller won’t need to negotiate with the buyer if the bank’s appraised value for the home is below the asking price. This is a tricky situation as the buyer will need to enter into a new agreement with the owner/seller about the asking price or make up the shortfall with their own capital.
Ensure that you get a professional to draft the agreement and explain all the additional clauses and contingencies, as it can be a minefield that only a professional can help you navigate.
As we mentioned, when asking how to negotiate a home’s price you need to make it easiest for both parties and ensure that you’ve both met in a middle-ground.
If timings are tight, the buyer can waive the inspection contingency and offer a shorter contingency period. While this will mean you’ll be responsible for inspecting the property, it also means if you do miss any details, you’ll be covered.
Finding that quicker route from A to B will mean that there’s a faster closing of the escrow for the seller and buyer.
And that’s a good thing if you want to change addresses quickly and efficiently.
Sometimes, we feel pressured to follow through with a deal as there’s been a significant investment of time and money at this stage. But, never be afraid to pull out of a deal if you’re not satisfied.
You must believe you’ve agreed to the best deal. This is a significant and stressful experience. If you get this wrong, you may be losing a lump sum of capital that will take you years to reaccumulate. Never rush a deal.
Transfers and closing schedule
Transfers and the general timeline for a closing date on a property sale, or when the property’s ownership has officially transferred, can take anywhere between 30-90 days.
Typically this timeframe is stated in the contract and signed by both parties when entering escrow.
As mentioned, factors like a higher number of contingencies that need to be met can extend this timeframe. If the buyer is an all-cash buyer, this period will be drastically shortened.
If you are facing a tight deadline or might want to avoid the need to move into a rental property for a month. It’s in your best interest to shorten the timeline.
Sometimes it’s wise to discuss preferred time frames during this closing schedule as buyers might want to move in sooner, while sellers could do with the occupational rent to fund their next purchase or investment.
And if you’re trying to attract more buyers to your property, you may want to communicate this flexibility.
Settling closing costs
As we’ve mentioned earlier, there are several steps where you’ll require expert help. The professional fees incurred during this transaction can add up. Typically, they amount to around 1% - 2% of the total selling price, and depending on the agreement, it can be split between both parties.
Once again, settling these closing costs on behalf of the other party can be another negotiating tool.
A standard part of an agreement is that the buyer requests that the seller covers their portion of the closing costs, or individual transfer taxes or fees, by subtracting it from the sale price.
However, this eats into the sellers' take-home, and it would be in the best interest of both parties that an expert sees to the legal agreement.
If you’re worried that it sounds complicated, time-consuming, and involves loads of hidden costs, you’re not wrong.
But what if there was an easier way with a cash buyer who just wants your home as-is.
Avoid the Hassle of Negotiating House Prices With The Traditional House Selling Process
After reading the details involved in negotiating, you may not be interested in figuring out how to negotiate the price of your house.
You want to meet with a buyer that’ll offer you a fair, competitive offer, give you cash, and let you walk away without having to worry about any contingencies.
With House Buyers of America, we buy houses for cash. You avoid the hassles of negotiating with the traditional real estate selling process.
So, let us help you sell your property in virginia house buyers, Washington DC, and Maryland.
House Buyers of America is the easiest and most hassle-free way to sell your house fast. Simply call House Buyers of America because we buy houses for cash. Call us on 855-659-3289 or fill out our online form.
There is no obligation to sell to us, but we will make you a cash offer on your home. After you've answered a few questions, you can accept our offer and be on your way to selling your house within days!
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Sell your home directly to House Buyers of America and can skip all the hassle and months of uncertainty. Simply enter your address – and get our offer with a few simple steps.
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