Whether or not you’re a first-time homebuyer, you’ve probably given some thought to how to negotiate with the seller when it comes to contract time. But most homebuyers focus only on price.
While price is critical, it isn’t the only part of the contract you may want to negotiate. Particularly in a market when inventories are low, being able to negotiate on things besides price could help your offer. At the same time, trying to negotiate on too much will have the seller move on to other offers.
So what’s fair game when it comes to negotiating your home purchase?
1. Repairs. When inventories are low, sellers are less likely to want to make repairs. But that doesn’t mean you should agree to move forward without a home inspection. Your better strategy is to have the home inspection done and if necessary, use the needed repairs as a bargaining chip.
2. Closing costs. Because they can run as high as 2 to 7% of the purchase price, buyers often try to negotiate on closing costs. But that can be a tough sell in a tight market where sellers are considering multiple offers. Think twice about negotiating the purchase price and also asking the seller for help with closing costs. Instead, consider offering a higher price on the home, then ask for a bit of assistance to close. Sellers are focused on net proceeds. Plus, sellers willing to help with closing costs reap the benefit of improving the chance the transaction will close.
3. Closing date. Do you have flexibility on when you need to move from your current home? If so, you may be able to meet a seller’s needs if you indicate you can be flexible on the closing date. In some cases, buyers have found favor by offering to rent the home back to the sellers for a very short period of time following closing to allow the sellers more time to move out—and clean up.
4. Furniture, décor and appliances. If you see a piece of furniture you really like in the home or you want the owner to leave behind their refrigerator, for example, you can work this into the contract. Be cautious, however. Speak to your lender about whether this might be better handled as a separate transaction.
5. Home warranty. Sometimes, asking the seller for a home warranty makes sense and may be well-received. For example, a home may have an aging—but fully operable—HVAC system. The seller may prefer providing a home warranty rather than negotiating on the price to compensate for major home systems that are likely to need repair or replacement in the near future.
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