Home buying negotiation

Naturally, the price of a home is top-of-mind when we talk about negotiating in a real estate deal. And, for some homebuyers, these negotiations are critical.

But, did you know that there are other ways to bargain with a home seller other than on price? When you receive an offer on your Northern Ohio home it is full of haggling opportunities. Let’s take a look at five of them we deal with most often.  

1. Repairs

In Northern Ohio I’ve noticed an substantial increase in the number of people getting home inspections.  Younger first time buyers in particular seem to be increasingly getting home inspections.  Negotiating home repairs is something we are quite familiar with. After the home inspection, when the homebuyer receives the inspector’s report, negotiations often begin anew.

Understand, however, that no home is perfect; even newly-constructed homes can have problems and often do.  I once had a 6 month old home that had never been occupied because the owner was transferred before he could complete his transfer (poor guy) fail the electrical inspection.  How did it pass the city inspections in this fairly affluent westside community? Don’t sweat the small stuff – save the negotiations for anything major that needs repair or replacement – like electrical safety issues.

This is especially true if the problems are in one or more of the home’s major systems, such  as HVAC, electrical, plumbing or with the roof or foundation.

We can negotiate for a price reduction, closing costs credit or for the repair work to be performed by the seller before closing. The first two options (price reduction or credit towards closing costs) are preferable, as they won’t typically delay the closing.

Plus, there is no way to guarantee the repair work, if performed by the seller’s contractor, will meet your standards.

 

2. Closing costs

With a mortgage comes a requirement to pay a down payment and closing costs. The latter includes all the costs of obtaining the loan, such as lender fees, notary fees and more.

While sellers are under no obligation to do so, many buyers negotiate with the seller to pay all or part of their closing costs.

It’s an easier pill for the seller to swallow if:

  • Your offer for the home is at full asking price
  • You intend to keep your request for repairs to a minimum. If the seller has to pay for a laundry list of requested repairs, he or she may not be amenable (or have the funds) to assist with your closing costs.
  • You put some skin in the game as well, by paying for a portion of your closing costs

3. Personal property

Anything that isn’t permanently affixed to the home or land (real property) is considered the personal property of the homeowner. Personal property that we commonly negotiate over for our home buying clients include:

  • Appliances, such as refrigerator, washer, dryer
  • Window coverings
  • Chandeliers
  • Portable out-buildings

Buyers, however, have negotiated for furniture, pool tables, artwork and even the family pet.

4. Closing date

The closing date – the day on which the home becomes yours – is negotiable. This is important to know for several reasons:

  • If you are trying to time the closing of your current home to be simultaneous with the new home’s closing.
  • You need more time to find another home
  • You are relocating and need to be in your new city by a certain date

If your schedule doesn’t conflict with the seller’s this is often a successful negotiation.

5. Home warranty

Real estate agents have a love-hate relationship with home warranties. Some consider them useless while others love them for the peace-of-mind they offer homebuyers.

If a home warranty is something that you desire, it’s possible to ask the seller to provide you with one – at least for the first year of home ownership.

Basic coverage varies by region and company, but commonly includes coverage for:

  • HVAC systems
  • Kitchen appliances
  • Plumbing
  • Electrical
  • Roof leaks

While the above is only a partial list of commonly negotiated items in a home purchase, it outlines the ones we see most often.

Tools in Your Realtor’s Toolbox

I’m currently dealing with a third offer from another agent.  I’m representing the sellers, a lovely older couple who are selling the lakefront home in which they raised their children.  The offer presented included the sellers pulling their home off of the market while the buyers attempted to sell their home.  That’s all good but…

  • The agent did not include ANY info on the home they needed to sell, not even a simple CMA.  The value of their home, it’s “Marketability”, is obviously a key issue in this deal.  
  • The agent needed to sell their clients character.  How much do they want this home, and how willing are they to negotiate the homes price to obtain a quick sale.  They should have asked to meet the sellers and present the offer in person.  
  • There wasn’t a cover letter explaining the offer, the buyers, their situation, and a brief introduction of “who they are”.  A cover letter can make a difference!

Your agent has multiple negotiating tools they can use that may not be commonly used, but should be used when presenting an offer.  Interview your prospective agents, ask them questions, and when presenting an offer ask them how they intend to “sell” your offer to the sellers. 

You are paying your agent to represent you and to educate you regarding the process.  Don’t be afraid to ask questions as a buyer or seller!

Feel free to reach out to us if you have questions on this or any aspect of the home purchase process.

 

www.HiseyGroup.com    440-315-6000   Lee Hisey

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