Are you trying to negotiate a better deal in real estate? While there are many ways to go about it, some strategies are definitely more effective than others.
We’ve put together this list of the most successful ways to ask for discounts in real estate. If you want to hear “offer accepted!” then you need to keep reading.
How much does it cost to buy a house?
There are various costs involved when you try to buy a home. While a home’s final sales price can vary greatly depending on your budget, there are constant factors that impact this number, no matter its final size.
Here they are:
Closings costs can vary from deal to deal, but for the most part, you can learn about what they typically include here (hint: it’s usually things like home inspection fees, lawyer’s fees, etc.).
Your down payment is usually 20% of the total sales price of your home.
So, for example, let’s say that you purchase a home for $250,000. 20% of this is $50,000, so that’s the amount you would need to pay up front on the home. You would then use a mortgage to pay for the rest.
If you use a Realtor to help you sell your house, then obviously they need to get paid! The person selling the home pays the Realtors for both the buyer and the seller. Both typically take about 3% commission, for a national average of 6% total.
How much does a real estate agent cost?
As mentioned, the typical Realtor charges 3% for their services. Since it is a good idea to have two real estate agents involved in every deal, sellers will have to pay 6% commission on each sale. There are agents that charge less commission than this, but it is usually for less service as well.
The one exception to this would be flat fee agencies like Clever. This is because they already have a sustainable business structure, so they don’t need to charge an arm and a leg for commission.
How can I negotiate a discount in real estate?
There are definitely other ways to get a discount on real estate rather than just using a cheaper agent. In fact, one of the best ways to get a discount on real estate is actually to hire a better agent. This is because the better the agent, the better they will be at negotiating a better deal for you.
How should I act during negotiations?
Here is everything you need to know about asking for discounts in real estate:
Let the seller know you mean business.
One of your main goals should be to convince the seller of the property that if they bet on you, you are actually planning on closing on the property. This is because a savvy seller is more likely to accept a smaller offer from someone they know is going to go through with the sale, rather than an insane offer from someone who is just spitballing and probably not that interested.
In order to convince the seller that you intend to actually close on the property, be sure to submit a “complete package” along with your offer, which might include a detailed loan approval letter. This is important because it verifies that you have enough money to close the transaction, that you have a good credit score, and that you have a good job.
Having a better agent can also help during this bit because if they have a good reputation in the local real estate industry, they might be able to negotiate and score you a great deal.
Keep your emotions out of it.
Negotiations over a listing price have many opportunities for strong emotions. However, if you are interested in actually coming out on top, you need to keep yourself disinterested. If a seller says no to an offer you made, you need to understand things from their point of view.
They are trying to pay off their mortgage as well as receive a fair price on the most expensive asset that they currently own. Even if you think that the seller is pushing it with their asking price, especially if the home is for sale by owner, refrain from getting worked up.
The opposite is also true.
Don’t show your cards to the seller! If you are absolutely head over heels for a house and it shows, you have nearly immediately lost all of your bargaining power. You have to be able to remain businesslike and know when to walk away.
However, if you really do love a house, feel free to budge a little bit. After all, that’s what negotiating is really all about – compromise on both sides.
As mentioned, remaining kind and respectful throughout the process is one of the best ways to ask for discounts in real estate. It is important to remember that while you can’t control the behavior of the seller, you can always control your own behavior. Because of this, be careful with your words as well as your body language.
Be sure to practice active listening and keeping yourself physically open to the person you are communicating with, as it creates an instant connection.
If the right moment arises, feel free to include humor into the situation – just to keep things light and friendly. Always remember to end negotiation on a good note. Even if you are walking away from the deal, always leave on good terms. This is because you never know if a counter offer could still be coming a few hours later.
What should I even try to negotiate?
There is no cut and dry list of things that sellers are not willing to budge on.
You have to put your listening ears on and do an assessment of what is important to the person across from you. Work with your agent to suss out what is non-negotiable right off the bat so you don’t step on any toes, then go for the jugular on things that are left up in the air.
What if I am a home investor?
Whether you are purchasing a property to be an owner-occupant or to flip it, the general principals are the same: you need to be flexible and open-minded.
Be willing to compromise and change your own mind. Think about things from the perspective of the person across from you. If you do this, you can walk away feeling good with what you needed done, done.
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