Naturally, the price of a home is top-of-mind when we talk about negotiating strategies in a real estate deal. And, for homebuyers, the negotiation process is critical.
But, did you know that there are other ways to negotiate with a home seller other than on price? The purchase agreement is full of negotiating opportunities. Let’s take a look at the top six:
Negotiating home repairs is something we are quite familiar with. After the home inspection, when the homebuyer receives the inspector’s report, the negotiation process often begins anew.
Understand, however, that no home is perfect; even newly-constructed and newly renovated homes can have problems. Don’t sweat the small stuff – save your negotiation skills for anything major that needs repair or replacement.
This is especially true if the problems are in one or more of the home’s major systems, such as HVAC, electrical, plumbing, roof or foundation.
We can negotiate for a price reduction, closing costs credit or for the repair work to be performed by the seller before closing. The first two options (price reduction or credit towards closing costs) are preferable, as they won’t typically delay the closing.
Plus, there is no way to guarantee the repair work, if performed by the seller’s contractor, will meet your standards.
2. Closing costs
With a mortgage comes a requirement to pay a down payment and closing costs. The latter includes all the costs of obtaining the loan, such as lender fees, notary fees and more.
While sellers are under no obligation to do so, many buyers negotiate with the seller to pay all or part of their closing costs.
It’s an easier pill for the seller to swallow if:
- Your offer for the home is the full asking price
- You intend to keep your request for repairs to a minimum. If the seller has to pay for a laundry list of requested repairs, he or she may not be amenable (or have the funds) to assist with your closing costs.
- You put some skin in the game as well, by paying for a portion of your closing costs
3. Personal property
Anything that isn’t permanently affixed to the home or land (real property) is considered the personal property of the homeowner. Personal property that we commonly negotiate over for our homebuying clients include:
- Appliances, such as refrigerator, washer, dryer
- Window coverings
- Portable out-buildings
Buyers, however, have negotiated for furniture, pool tables, artwork and even the family pet.
4. Closing date
The closing date – the day on which the home becomes yours – is negotiable. The more flexible you are the better. Negotiable closing date items to consider:
- Timing the closing of your current home to be simultaneous with the new home’s closing.
- You may need more time to find another home
- You are relocating and may need to be in your new city by a specified date
5. Home warranty
If a home warranty is something that you desire, it’s possible to ask the seller to provide you with one – at least for the first year of home ownership.
Basic coverage varies by region and company, but commonly includes coverage for:
- HVAC systems
- Kitchen appliances
- Roof leaks
5. Financing Home
Whether you’re paying cash or obtaining a mortgage can be a game changer when negotiating all of the above. We’ve all heard CASH is king. This holds true in the homebuying process. A cash buyer has the upper hand when dealing with a motivated seller. There are numerous negotiation opportunities for cash buyers throughout the transaction.
While the above is only a partial list of commonly negotiated items in a home purchase, it outlines the negotiable process seen most often. As you can see, it’s incredibly important to hire an experienced real estate agent to represent you throughout the negotiation process.
Feel free to reach out to us if you have questions on this or any aspect of the home purchase process.