In our last blog post we discussed what you need to do to get ready to negotiate your home price. Today we want to hone in on what you can do during negotiations and how to achieve the best possible price for your prospective property.

Once you’ve been pre-approved for a loan and have found that dream home or property you are ready to put on the gloves and negotiate! Whether you are working through a Realtor or on your own, stick to some of these key tips for negotiation success:

• Obtain information about your seller. In a down market, people are a little more desperate to “unload” their homes, especially if they are trying to avoid foreclosure or other legal proceedings. Although many sellers are still trying to sell their homes at 2006’s prices, knowing their motivation will give you the bargaining chips you need to back your offer. Useful negotiating information includes potential foreclosure, divorce, death or short sale.
• Learn about the strength of the particular market. Find out if homes are selling fast or slow in that area. Knowing the strength of that area will provide insight into whether you need to negotiate more fiercely in a strong market or if you can take your time and start with a lower price point in a weak area.
• Don’t let one point stall negotiations. If you can’t agree on one minor aspect of the offer, settle other points first. For example, if you want to include the furnishings in a prospective home, but the buyer wants you to pay more, don’t allow that disagreement to derail the entire process. Settle major aspects first such as price, closing and how you will pay (mortgage loan or cash).
• Maintain your poker face. Be ready to walk away if negotiations head in the wrong direction, such as exceeding your ceiling price. Just like the game of poker, you need to know when to hold them and when to fold them. Don’t show emotion because it could tip the buyer to your intrinsic motivation, giving him a leg up.
• Offer less than the original asking price on the first offer. A general rule of thumb is to reduce the price by 5%. Since most prices end up somewhere in the middle be sure you could live with that amount should the seller counter your initial offer. Don’t forget to include taxes, insurance and other costs to include with the sale price.

For more information on how to get the best price for your home, contact one of our AmeriFirst at 800-466-LOAN or contact us.