How to Negotiate with Sellers

Buying a home is one of the most important purchases most people will ever make. In order to make the right decision the first time, potential buyers need to be prepared. Consider the following before starting negotiations:

• Be prepared. Research the housing market in the target area. Once you have information about the general area, focus on the particular property and seller. Look for answers to questions such as:
  1. Why are the homeowners selling? Are they moving because they find the area undesirable, you might want to consider this issue.
  2. How long has the home been on the market? If so, perhaps there are negative factors about the property you should know.
  3. How much did the seller pay for the home compared to the current asking price? If the seller paid more, find out why. Was it a general real estate trend or did the property values in that particular neighborhood go down?
  4. What is the seller’s time frame for selling and moving? Does it fit with your needs?
  5. Are there any defects in the home or problems with the surrounding area? (For example, is the roof so old that is will likely leak during the next storm? Is there new construction in the area that could lead to traffic congestion?)

As the potential buyer, you want the advantage. While you want answers to all of your questions to the seller, reveal very little about your circumstances. Do not give the seller personal information such as your income, the maximum you are able to pay for a down payment on the home, or when you want to move. Make sure that your agent knows not to reveal any such information to the seller or their agent.

Also, do not let the seller see how much you want the property. If you appear desperate or overly enthusiastic, the seller then has the stronger bargaining position. When meeting with the seller or listing agent, keep your emotions in check.

• Establish a Timeline. Find out if the seller needs to have the sale closed sooner rather than later. If the seller is feeling pressured to sell, use that to your advantage in negotiating. Even if you, the buyer, are the one with the deadline for purchasing a home, do not let yourself be rushed into making concessions or a purchase you may regret later.