For many property sellers, their asking price is the bare minimum they are prepared to accept for their home while, for others, it is a baseline amount they are willing to negotiate from.
Setting a realistic asking price, however – especially in a buyer’s market – is incredibly important as overpricing a property could deter potential buyers and leave the property sitting on the market for a long time; buyers may then wonder if there is something wrong with it.
For buyers, deciding whether to offer the asking price or try their luck with a lower offer is often a consideration, especially if they really want the home and can afford the asking price.
In some cases, it is a good idea to just offer the seller the price he wants if the home is exactly what you are looking for. Generally though, negotiating an offer to purchase a property is a crucial step in the home buying process, and even a relatively small downwards price adjustment will save you a decent amount of money on your home loan repayments each month – and over a full 20-year repayment period.
The pros of negotiating your offer-to-purchase a home:
– Getting the right price
Negotiating is like finding the sweet spot for a good deal as it lets you consider all the factors and aspects of the property and its price based on market dynamics, the property’s condition, and recent sales prices in the area.
– Saving money
Negotiating the purchase of the property does not need to just revolve around the price you are willing to pay as you can also ask the seller to perhaps fix up a few things in the house before you buy it.
– Understanding the selling reasons
Negotiating your offer may help you understand a little bit more about why the seller is selling and how urgent they need the sale to go through. Knowing such information may give you the upper hand in negotiations
– Getting more of the home you want
If you want specific repairs done or even certain features included with the home, you are able to negotiate this too.
The cons of negotiating your offer-to-purchase a home
– Emotional stress
Back-and-forth negotiating can be a bit of an emotional roller coaster, especially if you're head over heels for the property. You need to be patient and have a cool head.
– Time delays
Ongoing negotiations could delay the whole buying process which may not help if you need to move in as soon as possible or are juggling the sale of your current home.
– Risky business
If the negotiations are not handled right, there could be misunderstandings and awkward situations, and this could push the seller to consider an offer from another potential buyer.
While negotiating your offer-to-purchase a home can lead to a good deal, it can be a careful balancing act that could quite as easily fail as it could succeed. However, having a skilled real estate agent by your side can make the process smoother as they will understand the urgency of the sale or how much the seller is prepared to negotiate, and understand the market conditions; they can therefore advise you accordingly.