Understanding the negotiable aspects of a home purchase can significantly benefit buyers when entering the real estate world. This knowledge can potentially save thousands of dollars and ensure that buyers get the most value and satisfaction from their new homes. Here are critical things buyers should consider when purchasing a new home.
1. Price
The most obvious yet significant, negotiable aspect is the home’s price. While it might seem straightforward, successful negotiation requires market research. Understand the local market trends, compare similar property prices, and consider the home’s condition. A well-informed offer that reflects these factors can lead to meaningful negotiations.
2. Closing Costs
Closing costs can add up, including fees for the loan, title transfer, inspections, and more. Negotiating with the seller to cover some or all of these costs, can potentially save the buyer thousands of dollars. Sometimes, sellers are willing to negotiate on closing costs rather than lowering the sale price, as it might be more tax-efficient for them. This is also a common negotiation tactic when buying a new build, as the builders want to keep the sale price high for future home sales, but might be willing to wiggle a bit on lowering the closing costs to get the house off the market.
3. Home Repairs
After a thorough home inspection, you might discover issues that need addressing. Whether it’s a leaky roof, outdated electrical systems, or plumbing issues, buyers can negotiate for these repairs to be made before the sale is finalized or ask for a reduced price to cover the repair costs. It’s crucial to prioritize which repairs are worth negotiating, as not all will be deal-breakers. This is also why you should always have a home inspection to identify any major issues and know what you are getting yourself into.
Home repairs can be costly, but is often something the seller is willing to lower, so that they don’t have to deal with the repairs themselves.
4. Home Warranties
A home warranty can offer peace of mind by covering repair or replacement costs for appliances and systems like heating and air conditioning. If the home doesn’t come with a warranty, buyers can ask the seller to pay for one as part of the sale. This can save you from unexpected expenses during your first year of ownership.
5. Appliances and Fixtures
Not all home sales automatically include appliances and fixtures. It’s essential to clarify what stays and goes. If you’re interested in keeping certain items like the washer, dryer, or custom lighting fixtures, these can be negotiated into the sale.
Sellers might be willing to include these items to close the deal, especially if they plan to upgrade or won’t need them in their next home. They might not want to move them, and actually be interested in leaving them with the house, so it is a win-win for everyone involved.
6. Closing Date
Flexibility around the closing date can be an attractive bargaining chip. If the sellers need more time to vacate or if you’re not in a hurry, pushing back the closing date can be a point of negotiation that benefits both parties.
Conversely, if you need to move quickly, offering a faster closing might entice sellers to choose your offer over others.
7. Home Inspection Contingencies
While it’s standard to include a home inspection contingency in your offer, the specifics can be negotiable. This includes the timeline for the inspection and what kinds of issues would allow you to back out of the deal. Negotiating a thorough inspection can reveal hidden problems and give you more leverage in price negotiations.
8. Mortgage Loan Points
Buyers can negotiate with their lenders on points—a form of prepaid interest that lowers your overall interest rate. Sometimes, sellers are willing to pay points as part of the negotiation, reducing your long-term mortgage costs.
9. Property Taxes
While you can’t negotiate the tax rate, you can always approach the seller and ask if they are willing to pay a portion of the property taxes for the year in which you’re purchasing their home. This is often prorated based on the closing date.
Conclusion
Buying a home involves numerous negotiable aspects beyond just the price. By understanding what can be negotiated, you’re better equipped to make an offer that meets your needs and budget.
Each real estate transaction is unique, and flexibility, along with a good understanding of what’s most important to you, will guide your negotiations. Remember, having a well-informed real estate agent by your side can provide invaluable insight into the current market, help assess your needs and help you get the best deal you can to find the perfect home!
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