For some buyers, the idea of having to negotiate when purchasing a home can feel like a tall task. In a perfect world, you would submit an offer, the seller would accept, and the transaction will close. However, negotiations and counter offers in a real estate transaction are pretty normal.
Even when working with the most experienced real estate professional, how much to offer and when to counter is not always cut and dry. How much can you negotiate when buying a home? Consider these options before you put an offer on your dream home.
Buyers or Sellers Market
The current state of your local real estate market is one of the most important factors to consider if you want to negotiate a better price on your new home. In a buyers market, there are more homes for sale on the market than there are buyers. This typically means sellers are more eager to sell and giving you the upper hand when discussing price.
You don’t have to negotiate the price. Consider having the seller pay closing costs, your preferred closing date, and other contingencies.
In a sellers market, there are more home buyers than available inventory on the market. Typically this would mean the home you are submitting an offer on would have multiple offers. In this situation, you might have to offer the asking price or slightly above to secure the home you really want.
4 Things to Negotiate When Buying a Home
1. Closing Costs
Closing costs can represent 2%-5% of the purchase price and can be covered by the seller when you submit an offer or counter offer. Typically if the seller is eager to move, asking to cover the closing costs is not uncommon.
2. Flexible Closing Date
If it works in your schedule or situation, offering to be flexible on closing date can make your offer stand out. Selling your home and potentially moving can be a stressful time. Giving some freedom to the seller to pick their move out date is an attractive offer.
3. A Home Warranty
It’s not uncommon to have repairs and work done on the house before you move in. Things break and having a home warranty for the first year or even longer is a worthwhile investment. You can ask the seller to cover the first year of your home warranty.
4. Household items / Cosmetic updates
You might consider to asking for minor repairs of the home before the closing date. For example, asking the seller to complete landscaping. These types of things are not “essential” and are often rejected. However, the seller might offer a small reduction in the overall price to makeup for any repairs or work that will need to be done.
You will want to come to your negotiations with knowledge of your local market and a list of reasonable negotiation asks to consider, and you will be closer to purchasing that dream house! Who you work with matters, if you want to talk to a professional real estate agent who understands the local Riverside, CA market, you can visit our contact us page or see a roster of our current real estate agents.