The Importance of Home Buying Negotiations

Knowing how to negotiate is one of the skills that you need if you want to get the best deals in real estate. Sellers in this industry usually list their properties at slightly higher prices because they expect buyers to negotiate. For instance, if the market value of a house is approximately $200,000, most buyers would price their home at around $215,000 in order to allow room for negotiation.

That means your negotiation skills will be crucial in determining whether you will get this property at $200,000 or at least a price that is very close. However, many buyers out there are not well equipped with the skill to handle these negotiations. Some don’t even know that negotiating is crucial if you want to get the best price in the real estate industry.

If you are keen to learn more about the importance of building your negotiation skills and why it is important to do so, this article from Amy Stockberger Real Estate (ASRE) is for you. We will discuss the benefits of negotiations, tips for how to negotiate, and why you should use a real estate professional to help with this process.

Let’s dive in!

Benefits of Home Buying Negotiations

1. Negotiating can help you get the best price

When buying a property your goal should be to get a home that meets your minimum requirements at the best possible price. Remember, the seller is also trying to maximize their dollar. Your negotiation skills could help you reduce the asking price to match the market value of the property.

2. Negotiating will help you build a better relationship with the seller

Through interacting with the buyer back and forth while trying to get the best price, you will likely get to them more than someone who pays for the property straight up without negotiating. These relationships that build in the industry will play a crucial role in getting other good deals in the future.

3. Negotiating could help save money for renovations

Most of the time, the property you buy will require doing some renovations in order to put it at your desirable standard. If you are good at negotiating and possibly get the property at a slightly lesser amount than the average market price, you will save off some money that you can use to renovate the house.

Now that you know why it’s important to negotiate while buying a house, let’s share with you some tips for homebuying negotiating.

Tips for Home Buying Negotiating

Tip #1: Have an idea of the market price

Before interacting with the seller, you need to, first of all, do your homework about the market price for the kind of house you intend to buy. Being familiar with the area will make it easier to know how much you should offer the seller during negotiations. The idea is to pay an amount that is slightly below or higher than the average market value. Of course, the condition of the house will also be a major factor during this process.

Tip #2: You need to consider the closing fees

Buying a home involves more expenses than just the listing price of the property. These fees generally range between 1% and 2%, and they are usually shared between the buyer and seller. The percent of these fees that you’ll pay will largely depend on how you negotiate with the seller. The goal should be paying 50% (at most) of these fees, but a lesser percentage is even better.

Tip #3: Use a real estate professional to help you with the negotiations

Hiring a real estate expert to help you with the negotiations might seem like another additional expense but the service they provide is well worth the investment. Here is why you should use a real estate team like ASRE to help you with home buying negotiations.

  • Knowledge: Real estate professionals are constantly involved in negotiations for buying properties—much more often than the everyday individual. The fact that real estate agents have dealt with a lot more sellers than you give them an edge in the negotiation process because they already know how to handle different types of sellers.
  • Experience: The art of negotiating is a skill that not everyone has and it improves over time the more you do it. The primary job of a real estate agent is mediating the sales of properties, which involves negotiating for a commission and also negotiating on behalf of the buyer or seller. It is safer to trust a real estate team to handle negotiations rather than doing it yourself because what you’ll pay for this service is a drop in the hat compared to the money saved during the negotiating process.
  • Time: Negotiating and connecting sellers to buyers of properties is the full-time job of real estate agents. This means they have more time to assess a home and find any aspects that might affect the asking price and/or negotiations.

Professional Real Estate Negotiators

Your negotiation skills will play a crucial role in determining the final price you will pay for your next home. Just as you want to get the best possible price, the seller also wants to maximize the value of their house at the same time. The way you handle your negotiations will have a big impact on the final price.

If you don’t have enough experience negotiating for houses in the real estate market, we recommend bringing on board a team of experts like ASRE to help you with this process. If you are buying a home in Sioux Falls, South Dakota, the knowledge and experience that Amy Stockberger Real Estate could save you thousands of dollars.