A seller’s market. You’ve heard of those. It’s when the seller has a clear and distinct advantage over the buyer when it comes to getting the deal he wants. But, just because it’s a seller’s market, doesn’t mean that you can’t negotiate for a better deal. Here’s how to win when the deck is stacked against you.
Submit a Pre-Approval Letter With The Offer
When you start the home-buying process, it’s assumed that you will get pre-approval for a loan before you start talking to sellers. Pre-approval letters are letters from a bank that price that you can afford to buy the home. It’s a sort of guarantee from the bank that the house will be paid for through a mortgage loan.
However, not all buyers actually do this, and some sellers are catching on. To show you’re serious, attach a pre-approval letter from the bank to your official offer. This will say to the seller than you’re ready to buy right now.
Hire a Killer Agent
Get a friend, or family member in the business to work with you. Or, hire an aggressive negotiator from a service like Agent Harvest. Whatever you do, get someone who has a proven track record for scoring big deals. This will be especially important in a seller’s market. Ask for references, and ask about past deals as well as the average discount on the homes he’s sold.
Don’t include wild demands in your offer. Instead, be friendly. You might only get one chance to make a good impression on the seller. If the seller happens to be especially intolerant of lowball offers or unserious buyers, anything but a friendly best offer will only earn you a rejection. If it’s customary in your area for you to pay the title insurance, then don’t ask the seller to do this for you. Also, be more generous than other buyers at closing.
If it’s customary for buyers to demand possession at 5PM on the day of closing, offer a few more days for the seller to move out. This shows that you’re flexible, even while you’re negotiating for a lower price.
Money always talks. Put down a sizable earnest money deposit. Sellers will feel you’re more committed to the deal if you come to the table with a 3 percent deposit. If you’re really serious, bring 20 percent. This is almost a sure-fire win. How many times does a buyer do this? Hardly ever. That’s why you’ll get the deal.
Normally, there are contingencies in a real estate deal. Some appliance needs to be replaced, the roof needs repairing, or maybe the siding has seen better days. Initially, you could negotiate for these contingencies. Then, if the seller is unwilling to budge, take them away and offer a negotiated rate that doesn’t include contingencies.
Always do this through a real estate agent though. The agent will be able to find a comfortable middle-ground where the seller won’t be offended and you won’t be ripped off in the deal.
Robert Groleau is a housing market guru. With years of experience, he enjoys blogging about his insights into a successful real estate experience.