First time home buyer? Learn to Negotiate!

Ring ring! This just in...the key to home buying begins with negotiation. Quit being a softy, it’s time to get at it. Before going into any home buying situation, be prepared to work with the price.

1. Get prequalified for a mortgage
   Getting prequalified for a mortgage proves to sellers that you're serious about buying and capable of affording their home. That will push you to the head of the pack when sellers choose among offers; they'll go with buyers who are a sure financial bet, not those whose financing could flop.


2. Ask questions
   Ask your agent for information to help you understand the sellers' financial position and motivation. Are they facing foreclosure or a short sale? Have they already purchased a home or relocated, which may make them eager to accept a lower price to avoid paying two mortgages? Has the home been on the market for a long time, or was it just listed? Have there been other offers? If so, why did they fall through? The more signs that sellers are eager to sell, the lower your offer can reasonably go.


3. Work back from a final price to determine your initial offer
   Know in advance the most you're willing to pay, and with your agent work back from that number to determine your initial offer, which can set the tone for the entire negotiation. A too-low bid may offend sellers emotionally invested in the sales price; a too-high bid may lead you to spend more than necessary to close the sale. Work with your agent to evaluate the sellers' motivation and comparable home sales to arrive at an initial offer that engages the sellers yet keeps money in your wallet.


4. Avoid contingencies
   Sellers favor offers that leave little to chance. Keep your bid free of complicated contingencies, such as making the purchase conditional on the sale of your current home. Do keep contingencies for mortgage approval, home inspection, and environmental checks typical in your area, like radon.


5. Remain unemotional
   Buying a home is a business transaction, and treating it that way helps you save money. Consider any movement by the sellers, however slight, a sign of interest, and keep negotiating. Each time you make a concession, ask for one in return. If the sellers ask you to boost your price, ask them to contribute to closing costs or pay for a home warranty. If sellers won't budge, make it clear you're willing to walk away; they may get nervous and accept your offer.


6. Don't let competition change your plan
   Great homes and those competitively priced can draw multiple offers in any market. Don't let competition propel you to go beyond your predetermined price or agree to concessions-such as waiving an inspection-that aren't in your best interest.

Your real estate agent will guide you, but you are the ultimate decision maker. The six tips given in the attached article will lead you in the right direction! Buying a new home is a hefty expense and it should NOT be thought of lightly. There are options. Don’t settle for the first thing you see. Ask questions!! Especially first time home buyers, the real estate market changes daily, prices alter, and answers are available to help you better understand. In your mind, lay out ideal prices to shoot for. Therefore, when you meet a real estate agent they will be better prepared to initiate your search. Competition shouldn’t stop you. If anything, it should motivate you.

Let the search to your new home begin now and always consider Homescout Realty to Upgrade Your Lifestyle. If you would like to speak to someone about all of the advantages of buying a home today email Joel Holland or call us at 312-377-4663!

Reprinted from HouseLogic with permission of the NATIONAL ASSOCIATION OF REALTORS® Copyright 2010. All rights reserved.