Buying your first home is huge milestone. There are numerous stresses that go into the process, but the biggest first hurdle is negotiating and getting the right price for your house.
Here are some things to keep in mind before you start the negotiation process with the seller:
Be prepared to do a lot of homework
When you find a house that you’re seriously interested in purchasing, be prepared to do a lot of homework to see how you can get it for the best price possible for you or your family.
It’s almost useless to remind you to know the market value of the houses you’re looking into purchasing, but you’d be surprised to find out how many people don’t do enough research on how much their desired houses are valued on the market. Zillow is a great place to start if you need to know a ballpark of how much houses in the area you’re looking into are worth.
With so many industries expanding their services through the web, you should also look through real estate agencies that have blogs. You obviously won’t be able to glean all the patterns about the housing market through looking at a blog once, so pick a couple of frequently-updated real estate blogs and read them often.
Know the seller and the house
When you’re negotiating your home, one of the most important things is to be patient and find out what’s going through your seller’s mind, instead of focusing on what you’re looking for. It’s important to figure out what fits your budget and your lifestyle, but once you have that down, it’s time to figure out what your seller wants as well. Is he or she looking to sell the place as soon as possible? Or are they not worried about time? If you submit an offer and it gets rejected, the seller might not be in a rush to sell the house, or vice versa, so play your cards carefully.
If the seller still isn’t willing to budge, you should consider making an offer based on a house inspection. If the house looks lived in, there’s a good chance that requesting the house inspection might prompt the seller to lower their ask, or reconsider rejecting your offer.
Keep your cool, don’t reveal too much
Just as important as it is to know your seller’s motives, it’s important not to divulge your own motives too early on. If the seller knows that you’re desperate to move, it might be harder for you to negotiate. So as much as you might want a house, don’t go overly express how much you love it or how much you love the neighborhood to the seller or the agent. Another thing, if you reveal that you might be able to pay for the house in cash, you might alert the seller that you have the money on hand, and that might also make it harder for you to negotiate. Be aloof and don’t rush the process; give yourself plenty of time to negotiate.
Don’t lowball a seller, and be willing to walk away
If you try to lowball on your offer, the seller is less inclined to take you or your negotiations seriously. Nobody likes to be lowballed, so make a firm offer that you believe is fair and within your budget.
But at a certain point you might have to prepare yourself for walking away from the house if negotiations don’t go the way you want, despite your best efforts. Depending on the area where you are looking, it may not be not too difficult to find another house with another willing seller who could be more accommodating to your needs. Keep in mind housing prices are steadily increasing, with record highs in places like California. Do just as much research for each of the houses you’re interested in, so that if one option falls through, you don’t have to then start from scratch.
Amy covers personal finances, student loans, and money management for younger adults. Her work has appeared in The Atlantic, Business Insider, New York Daily News, and more.