Preventing Pitfalls in Your Price Negotiation Strategy

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The Federal Savings Banks offers some tips to buyers on how to approach the negotiation table when buying a home.

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Consider whether a request that the homeowner pay all of the closing costs hurts the chances of getting the home.

In a seller's market, The Federal Savings Bank suggests buyers be crafty if they want to beat other offers for the property they want.

Getting a seller to accept an offer encompasses more than a better price than the competition. Here are some helpful price negotiation tips to avoid mistakes that can weaken your stance in a tight housing market:

  • Do Not Offer Too Low a Price: When you're buying a home, the goal is to get the lowest price possible, so your first offer will be below the asking price. While this strategy can help you save room in your budget, you want sellers to take you seriously. If you come in too low, they may not give your offer a second look.
  • Do Not Reveal Too Much Information: This is a mistake in a buyer's market too. Sellers and their agents shouldn't know too much about your finances before the offer is accepted. If they know how much you can spend, they'll hold you to that figure and will be less likely to take anything lower.
  • Understand the Seller: While you're keeping your information secret, learn what you can about the homeowners. Why do they want to move? How soon do they want to move? These and other questions can help you make a more informed offer.
  • Having too many contingencies: There's nothing wrong with wanting to protect interests when you buy a home. A property inspection clause, for instance, is a key part of any buyer's offer. However, do not ask for too much and alienate sellers. Consider whether a request that the homeowner pay all of the closing costs is hurting the chances of getting the home.

To find out about how you can get a low cost mortgage preapproval to back up your offer, contact the Federal Savings Bank, a veteran owned bank.

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