In what is now a seller’s market for housing, getting a good deal on a new home can be tough. In many markets, making an offer above the asking price may seem to be the only way to get the home you want.
But that is not necessarily the case. Neither is making a lowball offer and hoping for the best.
There are, however, some tactics you can consider that could improve your chances of getting the home at the best deal you can get.
The experts at Realtor.com have identified seven tactical tips that can improve your negotiating position. Thinking about how you could apply these tricks to your own house hunting raises your chances of getting the best deal you can.
Watch for a “price reduced” property. Most sellers want to sell as quickly as possible. Your agent can tell you how long a house has been on the market and if the price has been lowered by the seller. If the price has been reduced, you’re already part way to getting a good deal.
Sweeten the deal for the seller. Some sellers want out as soon as possible, so an offer to move up the closing date could help. Another seller may want to stay in the house for few weeks, in which case you can negotiate a reduction in price in exchange.
Look for a kitchen with potential. An unusually ugly kitchen can be a turn-off for most buyers. That usually keeps the house from selling quickly. Look more closely to see what you could do relatively inexpensively to update the kitchen.
Make an all-cash offer. If you can swing this, in exchange for a somewhat lower price, your chances of getting the house you want go way up.
Make a 20% down payment. This may not affect the selling price, but you will save money by not having to pay primary mortgage insurance.
Find a house being sold “as is.” The bargain here is that the sellers already have knocked down the price to account for repairs that have not made. Make sure that the discounted price is at least enough to cover the cost to fix what needs fixing. Just because the house is offered at $20,000 below comparable properties does not mean that $20,000 is enough to bring the house up to snuff.
Shop for your mortgage. Again, the price of the house may not change, but if you shop around and get a mortgage that is even a quarter of a point lower, you’ll save big bucks. A 4.00% interest rate on a $240,000 mortgage loan will cost you about $1,540 a month. A 4.25% rate will cost about $25 a month more. Over 30 years that’s a $9,000 difference.