Home Buying: How to Sharpen Your Negotiation Skills and Save Money

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Buying a new home can be a stressful, intimidating process without bringing negotiation into the picture, but being willing and able to bargain with a realtor could end up saving you a great deal of money. There are, however, multiple ways that you can increase your negotiation skills so that you’ll be able to get the best possible deal while shopping for your new abode.

1. Know Your Limits—And Don’t Go Past Them

Having a firm grasp of your financial situation going into a home-buying negotiation is a must, so you may want to consult a professional who can help you to know how much money you can spend on a property. A skilled realtor will likely try to pressure you with emotional appeals, references to other potential buyers, and the beauty of the premises, so understanding up front how much you can spend can help you to negotiate with confidence.

2. Figure out What You Need and Want

What kind of a home are you looking for? How many bedrooms should it have? How many baths? Do you need a swimming pool? A privacy fence? An alarm system? Answering all of these questions before facing a realtor will help to keep you from making an impulse buy based on features that aren’t essential to you. If you already know what you want, then you’ll be less susceptible to getting distracted during the negotiating process by unnecessary bargaining points.

3. Research the Value of Your Potential New Home

Modern technology has put a wealth of knowledge at the world’s fingertips, so house-hunters now have the option of looking up a variety of home listings online. Multiple websites can give you access to information about the sizes, prices, and qualities of houses in specific areas, so you’re no longer at the mercy of a realtor to tell you how much properties cost in a given neighborhood. Going into negotiations armed with specific knowledge of homes that other places have for sale can be a significant bargaining chip.

4. Value Logic over Emotion

Considering that you’re going to be spending so much time in your new living space, forming an emotional connection to a property is understandable. However, a realtor can use an obvious sentimental attachment to a house to convince you to pay more than the premises are worth or to overlook various flaws that you’ll have to address eventually.

5. Pay Attention to the Details

Real estate agents are often not going to be forthcoming about the shortcomings of the properties they’re trying to sell, so you need to keep an eye out for faults in your potential new home yourself. Can you see signs of water damage on the ceilings or floors? Does some of the wood show evidence of termite problems? Are the appliances modern and well-kept or have they accumulated wear and tear? Pointing out these various defects to a realtor can help you to drive the price down.

6. Be Ready to Act

While caution is helpful in the pursuit of a new home, being prepared to strike at the right time can be helpful in negotiations. If you’re certain that the property is worth the price and what you want, then moving swiftly can secure your new abode before another buyer can move in. A bold maneuver like offering a cash deposit or a short settlement time can help to swing negotiations in your favor.

7. Walk Away if Necessary

Sometimes no amount of skilled bargaining can give you the result you desire, so you may have to say no to an offer in order to find a home that meets your needs better in the future. While such a course of action might seem like surrender, it can actually lead to your discovering a more suitable piece of property later. Moving on to the next opportunity is preferable to ending up with a property you can’t afford or that has too many flaws, so don’t hesitate to pull the plug on a bargaining process that’s going to saddle you with anything less than the home of your dreams.

By Bob Gorman