How to Negotiate with a Home Seller

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Closing on a home is one of the most important moments in your entire life. Your new home will have a major influence on your personal life, as it is here where you’ll raise your new family and spend the next several years of your life. Not only will your new home have a major effect on your personal life, but it will also play a major role in your financial future. Mortgages can take years to pay off, and purchasing the wrong home can leave you in financial ruin. As a result, negotiating with home sellers for the right price becomes extremely important. So how exactly can you talk down the price of a home? Here’s how to negotiate with a home seller in order to ensure the best price.

Coordinate With A Real Estate Agent

When buying a home, it may be tempting to forsake the tradition of getting a real estate agent. After all, you might think real estate agents are too expensive and that you could fulfill a similar role with a little bit of research. However, this isn’t usually the case, as real estate agents are actually critical in the negotiation process. Real estate agents know just about everything about your local real estate market, meaning that they are a great asset going into negotiations. Knowledge is power in negotiations, and having a real estate agent on your side is a powerful asset. Real estate agents bring a wealth of knowledge and experience to the negotiating table, making them more than worth their costs.

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Come Prepared

Another thing you need to do to have strong negotiations with a seller is to come prepared. Although having a real estate agent on your side will greatly help in experience and knowledge, there are still some things that you need to prepare for yourself. Try to be familiar with your local real estate market. If you know that sales are slow, then you know that the seller has little bargaining power. Your real estate agent will help you in this area, but it doesn’t hurt to prepare yourself. In addition, you need to be in the correct mindset before negotiations begin. Know exactly what you want and are looking for and don’t let yourself be swayed. Preparation is key when it comes to negotiating, and the better prepared you are, the more likely it is you’ll negotiate a lower price.

Organize Finances

Negotiating with a seller can be much easier when you have organized finances. Before you begin negotiations, ensure that all of your finances are in order. To do this, you need to have all of your money accounted for, so you know exactly how much you have to offer. Tools like a mortgage estimator and a house payment calculator can be a huge help during this planning process. In addition, you should look to use your organized finances to secure a pre-approved mortgage. If you’re pre-approved when you make a home offer, the seller knows that your finances are in order and that they’ll have little hassle making the sale. As a result, you’ll be much more likely to secure an easy negotiation and a better deal.

Don’t Back Down

The final thing that can help you negotiate with a home seller is sticking to your guns and not backing down. Negotiating can often boil down to a test of wills, and whoever breaks first will lose negotiations. As a result, you need to be strong and not back down from what you’re offering. Have a set offer in your mind, and do not take any worse deal than what you want. You might even need to walk away from certain sellers, simply because they won’t budge and give you the deal you’re looking for. Walking away is fine, as it is a much better alternative than going over budget and putting yourself in financial ruin. If you’re negotiating with a home seller, don’t be cornered into a bad deal, and don’t back down from what you want.

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About the Author

Tobias Simmons is a personal finance blogger born in Ontario and based in Las Vegas, Nevada. He's no Doctor of Science or financial expert but is a self-taught student giving advice for the average peer.