How to Negotiate During a Real Estate Transaction

Often, your real estate agent will handle some of the negotiating, but you may want to be a part of it, too.

How to Negotiate During a Real Estate Transaction Close
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How to Negotiate During a Real Estate Transaction

Posted by Gary Ashton RE/MAX Advantage on Monday, October 22nd, 2018 at 12:16pm.

Cheap Real EstateGetting the best deal on a home is goal number one for most home buyers, but the best deal may not only be a consideration of price. For some buyers, more living space translates into the best deal and for others, it may mean the right location, a unique design, or even the ongoing costs required to live in the home.

Prospective buyers who are searching for their own version of a great deal can use some or all of these tips to help strategize their search and get what they want out of their future home.

Getting the Most Living Space per Dollar

One of the first questions typically considered by prospective buyers when looking at homes listed for sale is "How many square feet of living space does the home have?" Even first time buyers get the fact that having sufficient space in which to live comfortably and store excess possessions is what helps to give them an optimal living experience. But finding maximum square footage at the right price can seem difficult or even impossible, especially when the real estate market continues to be increasingly competitive.

To overcome this problem, prospective buyers can gain more square footage per dollar spent by looking for:

  • Older homes. Many older homes built prior to the 1990s were usually situated on larger lots and offered more base square footage than newer, more compact homes currently being built today on smaller lots.
  • Unfinished homes. Homes with unfinished space offer a real potential for being easily finished. Look out for homes that offer large attics, insulated garages, or unfinished basement spaces.
  • Homes with flexible spaces. Some homes have rooms that could be used for other purposes, such as homes that have formal dining rooms alongside eat-in kitchens or homes that have an insulated sun room or enclosed porch that could be easily heated and cooled.

Getting the Lowest Purchase Price

If getting the lowest price is the most important consideration for buyers, it may be time to consider a trade-off, such as:

  • Location. One way to save money is to choose a home that borders a favorite neighborhood, instead of being located within it.
  • Cosmetic appeal. A home can be livable but in desperate need of a makeover. Instead of picking a home already fully updated, consider looking for one in need of cosmetic updates.
  • History. Distressed homes or homes with flaws that make other buyers shy away can offer more affordability and less competition. Consider buying houses on the brink of foreclosure, or homes where a crime has been committed, instead of one with no obvious defects.

Getting a Home that Supports a Frugal Lifestyle

Being frugal is a popular––and very smart––goal for many home buyers today. But in order to truly enjoy a frugal lifestyle after the home purchase is made, buyers need to find a home that will save them money in more than just the purchase price. To find these homes, buyers should look for:

  • Insulation efficiency. Homes that already contain optimal amounts of insulation and high-efficiency HVAC systems will require less energy to keep homes at a comfortable temperature.
  • Energy-efficient installations. Homes with energy-efficient design features will make them easier to heat and cool, such as passive design options, double-paned windows, energy-efficient siding, etc.
  • Location. Homebuyers can cut down on expenses by selecting a location that is within walking distance to work and school, so that daily transportation costs are low or nonexistent.
  • Yard Space. Outdoor yard space for growing food or keeping food-producing livestock can cut down on grocery expenses by supplying food for the home-buyer's needs.

Understand the Seller's Motivation

Listening is far more important than talking in a negotiation. If you listen closely, you can easily find the motivation behind the seller's decision to list their home. This could help you to negotiate better, especially if part of the motivation is getting the home sold quickly.

Eliminate Emotion in the Sale

Yes, buying a house comes with plenty of emotion, but emotions don't help you during negotiations. Letting the seller know you really want the home won't help you, but it will help them. It's better to strip the emotions and focus on finding the win-win situation for both you and the seller.

Have a "Plan B" Home Option

When you fall in love with a house and you put all your eggs into one basket, you lose negotiating power. It's better to have a plan "B" in case the first house deal falls through.

When you have a solid second home choice, you can negotiate without feeling as emotionally attached to the first house. This will keep you from bending just to get the first house because you know there's another option.

Focus on the Facts

After the inspection and appraisal are done, you should know quite a bit about the home. The facts of the home can be very powerful during a negotiation. You don't want to worry about anything that isn't a fact and you certainly don't want to be dishonest. However, you may need to use these facts to keep the seller in check, especially if they have their emotions wrapped up in the value of the home.

Work With an Experienced Real Estate Agent

Purchasing a home doesn't have to be a stressful process that culminates in spending too much to own or live in the home. Prospective buyers who need or want to make the process as affordable and budget-friendly as possible should start by discussing their goals and needs with their real estate professional. Agents can use this information to help their clients choose better search criteria to make sure they are only looking at homes with good potential for their individual situation.

 

Gary Ashton

The Ashton Real Estate Group of RE/MAX Advantage

The #1 Real Estate Team in Tennessee and #2 RE/MAX team in the World!

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