5 New Home Pricing Negotiation Tips

5 New Home Pricing Negotiation Tips

  • Victoria Turner
  • 09/6/22

When you start investigating real estate, you know you’re in for an adventure. Buying a home is an exciting time, even though the current market in Sarasota and the surrounding areas still favors sellers. Many buyers wonder whether a real estate negotiation is likely to happen when each property might garner multiple offers. If you’re looking to invest in a new home this year and want to learn more about negotiating buying a house, this guide will walk you through everything you need to know to do so effectively.

Can buyers negotiate with sellers?

Real estate negotiation can happen both on the buyer’s side and on the seller’s. Buyers may submit an offer on a home that the seller then counters with a new offer. In competitive markets, counter offers aren’t as likely, because sellers are typically going to go with the highest offer that comes in. Once an offer is accepted, however, negotiations tend to cover things like repairs, pricing, contingencies, and more. Whether you’re buying or selling, know that the assistance of an experienced realtor can make all the difference as you get into the legalities of real estate negotiations.

Considerations to make before negotiating buying a house

When you enter into a real estate negotiation as a buyer, there are a few things to keep in mind to make sure the process goes smoothly. Of course, you’ll want to lean on your realtor for their expertise and advice, as they’ve handled negotiations before. But apart from that, consider these points before negotiating buying a house.

Your maximum budget

You never want to start a real estate negotiation without a very clear sense of how much you can spend. The last thing you want to do is end up negotiating buying a house and conceding to pay more than you can afford. Before you even start making offers, take a look at your budget in full. How much do you want to spend on a new home? If the market is competitive, you may want to search for homes listed under your total budget so you can make more competitive offers.

Similar properties nearby

When you find a property you love, work with your realtor to search for similar properties nearby. This will give you a sense of the market value of those kinds of properties, whether you’re looking at three-bedroom single-family homes or single-bedroom condominiums. If you find that the property you’re interested in isn’t priced comparably, it should send up a red flag.

Local competition

The final consideration to make before diving into the home buying scene is the local competition. Is there a high demand for Sarasota homes right now? If there are a good number of buyers looking for a small number of homes, it’ll change the strategy you use both for offers and negotiations.

New home negotiation tips

1. Get to know the local market

The first step you should take before making any offers is to research your local market. Are home prices appreciating or depreciating? How high is demand? What are the current median home prices you can expect from available properties? Being able to answer these questions will help you know what to expect as you look for homes. You’ll know whether you’re likely to get a counteroffer or whether you need to bid high from the start. And you’ll know how much you’ll need to budget for the type of home you’re interested in.

2. Start with your best offer

If you are working within a competitive market like the one in Sarasota, you’ll want to take a strategic approach to make offers. When you find a property you love, put your best offer first. Many homes in Sarasota receive multiple offers, and the average property moves from an active listing to a pending listing in only seven days. To be competitive in this market, you can’t count on sellers making counter offers. Put your best foot forward, so you have a chance at negotiating from there.

3. Keep contingencies in mind

There are many contingencies that can go along with buying or selling a home. Basically, these are agreements made between the buyer and seller that outline particular actions that need to be taken for the contract to go through. For example, buyers might negotiate certain repairs from the seller before agreeing to purchase the house. Appraisal contingencies are another type that, if they aren’t negotiated, could end up costing the buyer more by the end of the deal.

It’s important to have a realtor by your side who can help walk you through the documents and legal aspects that go hand in hand with contingencies. Be aware, too, that in competitive markets like Sarasota, buyers and sellers often waive contingencies to ensure a speedier sale.

4. Have the home inspected

You never want to agree to buy a home that you haven’t inspected. Always hire an independent inspector with real estate experience who will know how to evaluate the foundation, plumbing, electrical, and HVAC systems and other issues that could pose a financial problem down the line. Buyers have the most power in negotiations when they’ve found evidence of something unfavorable during an inspection. If you can, try to negotiate to have the seller pay for any repairs or renovations prior to selling you their house.

5. Work closely with your agent

Experienced agents are experts at navigating the choppy waters of negotiations. If you partner with the right agent, you’ll have no problem ending up with the best deal for your dream property. They’ll help you stay calm and reasonable as you work with the seller to come up with a plan that satisfies everyone.

Tori Turner knows how personal the home buying and selling process is. With well-honed negotiation skills and excellent attention to detail, Tori guides clients through all the fine print of a real estate transaction. To get the most out of your next real estate investment, contact Tori Turner.

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