
Negotiation is a delicate process. While you want to get the best deal possible on your home purchase, you don’t want to come in with a lowball offer and offend the seller. To help you understand the negotiation process so you don’t lose out on your dream home or any potential savings, we’ve put together this home buyer’s guide to negotiation.
How to prepare for negotiations when buying a home
Getting your finances in order before you start the home buying process will help ensure you’re in the best position to negotiate. Your offer will be stronger if you are preapproved for a mortgage, which shows sellers that you qualify for financing and can afford to purchase their home.
You should also save up money for a down payment and closing costs, which are usually between 2% and 7% of the home’s purchase price. Although you may be able to get the seller to help with closing costs, covering them yourself could make your offer more attractive.
Additionally, it’s important to understand the market conditions in your area. If there’s a limited supply of homes and lots of competition, for example, you may have less room to negotiate.
Finding a real estate agent to represent you will help you navigate a tough market. They’ll be able to tell you vital information about the potential property that can help inform your offer, like how many other offers there are and how long it’s been on the market.
How to negotiate when buying a home
One of the main things you should negotiate when buying a home is the purchase price. Sellers often price their homes above market value because they expect buyers to negotiate.
With that being said, the amount of money you’ll be able to save depends on market conditions in your area. If it’s a buyer’s market, you’ll have more bargaining power. But if you’re competing against several other buyers, you may need to lead with your strongest offer.
However, you shouldn’t go over your budget just because the home you love has multiple offers. Although it’s easy to get deeply attached to a house, you should try not to make emotional decisions when negotiating if you want to get the best deal. Having a few other houses lined up can make it easier to walk away if the seller doesn’t agree to your terms.
Although many buyers think of the purchase price as the main point of negotiation, there are lots of other things you can ask the seller for, including:
- A home warranty
- Closing cost assistance
- Help with buying mortgage points
- Repairs or cosmetic updates
- Furniture and other household items
- Flexibility on the closing date
If the seller seems unwilling to budge on the purchase price, you may be able to ask for some of their furniture, closing cost assistance, or repairs to reduce your out-of-pocket costs.
Negotiation tips
If you’re a first-time homebuyer who isn’t sure how to negotiate when buying a home, here are some tips that can help you successfully navigate the process.
- Don’t talk to the seller directly.
Your real estate agent is skilled in negotiation and knows how to make requests in a way that won’t offend the seller, so you should always communicate through them. You should also be careful about what you say to the seller’s agent. Accidentally revealing that the home is under your budget at the open house, for example, could make it harder to negotiate a fair price later on.
- Write an offer letter.
Although you probably shouldn’t talk to the seller directly, writing a heartfelt offer letter about why you want to live in their home can help you establish an emotional connection. If the seller knows that you appreciate their home as much as they do, they may be more likely to accept your offer and make concessions.
- Find out why the home is for sale.
Asking the seller why they’re moving can help you figure out how motivated they are. If they’re relocating for a new job or upgrading to a bigger house, they may be eager to sell and more willing to compromise on the purchase price.
The bottom line
It’s likely you’ll encounter a negotiation phase when purchasing a home. With these helpful tips, you’ll know what to expect, how to approach those conversations with the help of your realtor, and ultimately, how to get the best bang for your buck.
As always, we’re here to help with any questions you have and guide you through the process. Give us a call or start your online application today.

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