The real estate market can experience dramatic changes throughout the years. Although some periods experience stability, when the market is volatile and uncertain, many prospective homebuyers may be left wondering if they even know how to negotiate the price of their new home.
Worry not! At The Federal Savings Bank, we are dedicated to helping homebuyers learn the skills they’ll need to get into the perfect home. Here are five tips for negotiating a better home purchase price.
Steps to Negotiate Your House Price
Don’t be afraid to meet with a couple of different realtors and select the one that’s the best fit for you. Be sure you’re honest with your realtor about your budget and don’t be afraid to specify exactly how much you’re willing to spend– a good realtor will watch out for your wallet.
A great relationship with your realtor can also give you access to house listings that may not be available to the public yet. Having those extra few days to prepare your offer can be a key advantage if a property is expected to get a lot of offers and you’re interested in it.
A pre-approval letter can signal to a seller that you’re no window-shopper or Zillow-browser. Instead, it indicates that you’re serious about buying their home.
Before you seek a pre-approval for a conventional home loan, check to see if you qualify for an FHA or VA mortgage. While conventional mortgages may require up to a 20% down payment, FHA loans are guaranteed by the federal government and might have a down payment as low as 3.5%. They often offer better interest rates for those with low credit scores, as well as other benefits for first-time homebuyers. VA mortgages are backed by the U.S. Department of Veterans Affairs, and usually offer the best deal for qualifying homebuyers by eliminating down payments, lowering interest rates, and eliminating many fees.
A mortgage may be the biggest financial decision you make in your lifetime. One of our mortgage bankers can help you with a free consultation.
Some sellers will list their homes at dollar amounts 20% higher than the amount they’re really willing to accept. Look at comparable sales in the area – if a house with the same number of bedrooms recently sold just down the street for $35,000 less than what the seller is asking, you may have a lot of leverage as the buyer. If the seller can’t justify the higher cost, you can always counter.
Even if you do wind up paying the sticker price, keep in mind that you have the right to ask for seller concessions.
Don’t let your heart get broken – when you see the perfect home, you’ll want to get an offer in quickly. With a pre-approval letter from a mortgage lender, you might even be able to avoid a bidding war. Sellers appreciate a buyer who is serious, qualified, and committed to the sale.
While you must be decisive, take the time to read all the fine print. Consult with your team – your realtor, your attorney, and your loan officer – on all the important decisions. You will have to live in this home and make mortgage payments on it. Do not be afraid to say that a home is not the right fit for you.
If you want to find a good deal in a rapidly changing market, you must be prepared and decisive.
The homebuying process can be intimidating and exhausting, even to those who have been through it before. Having The Federal Savings Bank backing you up as your mortgage lender can put your dream home in reach. For more information on applying for a home loan, give us a call at +1 877-788-2520. With our expertise on hand, we can help you get the perfect house for the right price.
Subject to credit approval. Terms and conditions may apply. Property insurance is required on all loans secured by property.