Negotiating the price of a house is one of the most important aspects of the home buying process, so it's important to make sure all your Ps and Qs are in place to avoid paying more than you want for the property. Here are two things you must be sure to do when negotiating with the seller for your dream home.
Add an Expiration Date for Your Offer
One thing many homebuyers forget to do when making an offer on a home is put an expiration date on it, especially if they're trying to get a home in a hot market. But even if homes are in short supply and you're competing against multitudes of other people for property, it's important you set a date for your offer to expire for a couple of reasons.
First, expiration dates discourage sellers from shopping around for better offers. Without a deadline to accept or decline, a savvy seller could sit on your offer for weeks to see if someone willing to pay more will come along, leaving you in limbo.
Second, the deadline provides you with an easy way out of the deal if you change your mind about getting the home. If the seller doesn't accept the offer by the date you set, you can simply walk away to pursue other interests.
You can the deadline as long as you want, but it's a good idea to keep it short, maybe one or two days maximum from the day the offer was received so you're not waiting too long for an answer.
Amortize Your Offers
Another important thing you need to do when submitting an offer is to crunch the numbers to determine your monthly payments. Sometimes when a buyer gets involved in a hot negotiation with a seller or a bidding war with other buyers, they increase the amount of their offer without fully understanding how it will impact their mortgage payments. This can result in them ending up with a much higher monthly payment than they want or can afford.
Before submitting any offer (or counteroffer), amortize the amount to see how much you'll be paying each month. Be sure to include property taxes, fees, and other relevant expenses to maximize accuracy. This can help you decide whether you want to continue pursuing the home or search for something else more affordable.
For help negotiating with a seller or finding a home for sale, contact a real estate agent.