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Nolan Williams
Nolan Williams

Home Buying Negotiations

When Bob J. saw a model home he liked in a subdivision northwest of Dallas in October, a quick 24-hour negotiation with the builder netted him a savings of $125,000, free furniture and a fully decked out backyard already complete with a pool.

home buying negotiations

Pre-approval not only narrows down your home search to houses that fit within your budget, but also increases the strength of your offer. After all, when you include your pre-approval letter with your offer, the seller knows you can afford to buy the house if he or she accepts it.

On the other hand, if the seller just wants to upgrade and is still looking for another home to buy, they might not be motivated to move fast. This suggests there may be less room for negotiation, as this kind of seller could be willing to wait for the highest offer. Either way, this information is good to know!

So be prepared to move on from the home you had your eye on. Otherwise, you may be tempted to go way above your budget or offer full price on a house that needs some serious work before you should buy it. The best way to move on easily is to have a list of a few houses instead of just focusing on one. This allows you to quickly pivot into negotiations with the next house on the list as soon as an offer gets declined.

One of the most important things to understand when taking out a mortgage or home loan is how much interest you will pay over its lifespan. Since the pandemic, mortgage rates have reached historic lows, motivating many people to jump into the real estate market. The current interest on a 30-year fixed mortgage is around 3%, and around 2.4% for a 15-year fixed-rate mortgage.

Light fixtures and chandeliers can become quite the point of contention during the home sale process. While some sellers may be willing to leave them behind, others may be partial to a particularly fashionable or heirloom chandelier. If a buyer wants something included in the sale, they should make sure to get it in writing.

The home inspection is one of the most important parts of the buying process. If the results of a home inspection reveal more damage than anticipated, the buyer could use these flaws as leverage during negotiations. Depending on the severity of the repairs needed, a buyer can ask the seller to put money towards repairs, or make the repairs before they move in.

Before moving into a new home, many people want it professionally cleaned. Especially during these pandemic times, asking for the seller to pay for or put money towards professional cleaning services is not uncommon.

A buyer must pay transfer taxes or prorated property taxes after a house officially changes hands. Typically, a seller will cover these taxes. If there are multiple offers on a home, a buyer could make their offer more attractive by paying these taxes themselves.

Buyers can truly negotiate anything into the final sale of a home. If a seller has to pay a large fee to move a car or a boat to their new residence, they may be willing to leave it behind for the right price. Other personal belongings like televisions, art and more can also be negotiated into a deal.

According to a National Association of Realtors (NAR) report, negotiating the terms of a sale and helping with price negotiations were among the top three reasons buyers chose to work with a real estate agent (after the number one reason, assistance in finding a home).

An inspection report might reveal minor repairs that are needed or uncover more severe issues like termites or plumbing damage that the buyer, and sometimes the seller, wasn't aware of. Because repairs and upgrades cost money, the buyer can ask the seller to make the repairs or drop the home's price.

How much you offer depends on the market conditions when buying a home. If supply is low and demand is high (a seller's market), there might be multiple offers on a home that exceed the asking price. If there is more supply than demand (a buyer's market), you might be able to bid significantly less than the asking price.

You can tell a house is overpriced if comparable homes are priced lower. Two homes in similar neighborhoods, with lots and houses of the same size and amenities, should be close in price. Additionally, depending on market conditions, if the home has been on the market for a long time, it might be overpriced.

The best-case scenario when you submit an offer on a home is that the seller accepts it with no conditions. However, it's normal for sellers to respond with a counteroffer, which means they're open to begin negotiations.

If you decide to continue negotiations by presenting your own counteroffer, your counteroffer may address some but not all of the sellers' concerns. For example, you may decide to pay the higher sales price the sellers asked for, but only if they will agree to cover the closing costs or throw in the gas grill in the backyard.

Contingencies. A seller can reject or modify the contingencies, or conditions for purchase, that you included in your offer. Home inspection, appraisal and home sale are examples of contingencies. Before you consider dropping contingencies, be sure to speak with your real estate agent about the possible risks.

For example, if location is the most important factor, and this home is in the perfect spot for your kids' school and public transportation, stick with the negotiating process and work with your real estate agent to get creative on your counteroffer. is a product of ICB Solutions, a division of Neighbors Bank. ICB Solutions partners with a private company, Mortgage Research Center, LLC, (nmls # 1907), that provides mortgage information and connects homebuyers with lenders. Neither, Mortgage Research Center nor ICB Solutions are endorsed by, sponsored by or affiliated with any government agency. ICB Solutions and Mortgage Research Center receive compensation for providing marketing services to a select group of companies involved in helping consumers find, buy or refinance homes. If you submit your information on this site, one or more of these companies will contact you with additional information regarding your request. For a full list of these companies click here. By submitting your information you agree Mortgage Research Center can provide your information to one of these companies, who will then contact you. will not charge, seek or accept fees of any kind from you. Mortgage products are not offered directly on the website and if you are connected to a lender through, specific terms and conditions from that lender will apply.

Seller assistance in paying closings costs is a common request in home purchases, and sellers can ask for more than they might need for the actual closing costs, says Robin Eddington, a real estate agent in Alexandria, Va.

Most residential real estate contracts today include a clause that gives the buyer a chance to hire a home inspector before closing the deal. A home inspector is a licensed professional who will evaluate the subject property from top-to-bottom and identify any parts of the home that are out of code, or in need of repair or replacement.

Once you receive the report from your home inspector, send a copy to your real estate agent. Your agent should have experience in this area and a good agent will make recommendations as to what repairs or concessions you should ask for. They should also have a good sense of what the seller would be willing to do to complete the sale.

Negotiating after home inspection for repairs can be a fraught process, however, both parties have an interest in coming to an agreement. Make reasonable requests and be flexible around how concessions are made. If all else fails, you can back out of the deal.

Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But now, fewer people are waiving the inspection and appraisal.

The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection and appraisal is declining. And a recent survey from confirms more sellers are accepting offers that include these conditions today. According to their August study:

New construction home negotiations may feel impossible when builders often set prices and floor plans way in advance. But, it never hurts to ask. Even if negotiations in price are off the table, you may be able to negotiate the floor plan, appliances, or other home features.

Once you are familiar with the process, and you assess where your desired home is in the process, you can try to negotiate with the builder. Here are some common aspects of a new construction home you can try to negotiate.

If the new construction home you have your heart set on is in a subdivision, you will likely be responsible for paying homeowners association (HOA) fees when you purchase the home as well as on a monthly basis. Another assist you could ask for from the builder is for them to cover your HOA fees for the first year or more. Some builders will agree to do this in order to help offset the costs of buying the home.

New homes typically come with builder warranties. A standard warranty for new construction homes comes with one-year coverage on structural elements like siding, flooring, and drywall. It also comes with two-year coverage of heating and cooling systems, as well as plumbing and electrical elements.

You might find more success in negotiating if the price of the home stays the same but the builder adds more upgrades. However, you may need a lower purchase price to be able to afford your dream home.

By making the inspection report available to buyers, it can also be a good way to show good faith to those considering to purchase your home that you have taken additional steps to assure a safe home without any major issues.

Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. 041b061a72


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