Many sellers accept the best offer they receive, and for a variety of reasons.
But sellers are also known to reject offers for a variety of reasons. Or make counteroffers. This is especially likely if you bid low, or when you’re up against multiple competing offers.
Here are eight tips every buyer should know before you start negotiating:
1. Act Fast
When you receive a counteroffer, you should respond quickly — ideally within 24 hours. The longer you wait, the more space you leave for another buyer to swoop in and nab the property.
2. Raise Your Price (Reasonably)
While you don’t want to overpay for a house, you may have to up the ante — especially if you initially made a lowball offer. Lean on your agent’s expertise to determine how much money you should add to make it more enticing to the seller.
3. Increase Your Earnest Money Deposit
Increasing your earnest money deposit (EMD) is another way to show the seller you have more skin in the game. A standard EMD is typically 1% to 3% of the sales price of the home. Making a counteroffer with a 3% to 4% deposit could be what you need to persuade the seller to side with you.
4. Demonstrate Patience About Taking Possession
If the seller wants to stay in the home for a few days after closing, try offering a later possession date. You could also draw up a “rent-back” agreement, meaning the seller pays you to rent for staying in the home for a set period after the closing date.
5. Let Go of a Few Contingencies
Reduce the number of contingencies you’re asking for. It’s your way of saying, “Hey, look, I have fewer ways to back out,” which gives the seller more reassurance that the deal will close.
6. Ask for Fewer Concessions
When making an initial offer, you have the option to ask the seller for concessions — a settlement paid in cash to help you offset your share of the closing costs. However, this move is less feasible if you’re going up against multiple offers.
7. Pick Up the Cost of the Home Warranty
A basic home warranty costs about $300 to $600 a year, according to Angie’s List. If it seems like waiving the home warranty can sweeten negotiations, but you still want the peace of mind of having one, tell the seller they don’t need to cover it — then buy it yourself.
8. Know When to Walk
When negotiating with a seller, trust your gut — and your realtor. If he or she says a deal is bad for you: Listen. And if you don’t want to make any more trade-offs — and the seller won’t budge — it’s smart to walk.
That can be a tough decision to make, and rightfully so! Negotiating is tough. It’s draining. And losing something you’ve worked hard to get can be disappointing. But don’t worry. There’s a better deal for you out there.
If you need help, send me a message here and I will be happy to guide you.