The worst mistake a first time house buyer can make is thinking they must match the asking price. In some cases, houses in certain neighborhoods may go for much more than the asking price, but it is also fairly common for houses to be sold for a significant amount less than the initial asking price. Houses with less interest or those which have been on the market for a long time will have more flexible prices.
A good way to get started is to ask your real estate agent for a list of comparable homes in the area that have sold in the last 6 months. This will give you a rough estimate of how much the house you are looking at is likely to sell for and guide you in making your first offer. As mentioned above, how long a house is on the market can make a big difference in the final selling price, so pay attention to this when comparing prices.
In most cases, your real estate agent will meet with the listing agents and sellers to present your offer. They may accept, reject, or sign back your offer with changes. A sign back or counteroffer means that they will accept your offer as long as you agree to the changes they have stipulated. You are under no obligation to accept their counteroffer if you do not agree to the changes.
There are several aspects of a sale which can be negotiated:
Obviously the most important consideration in the sale, price is often highly negotiable depending on location, neighborhood, upkeep of the home, and a variety of other factors. Don’t be afraid to make small changes in the prices you are offering, the objective is to figure out how much lower – if at all – the seller is willing to go below the asking price. This should be apparent on the first or second sign back.
If the seller does not sign back your first offer, don’t despair: you can make a new offer at any time and your real estate agent or lawyer can walk you through the paperwork involved in formulating and making your offer.
As this will also be the moving day, this can be a large source of contention and may be the reason an otherwise mutually beneficial deal falls through. If one or both involved parties are flexible, this part of the sale will be much easier to negotiate.
Conditions on the sale may include things like finalizing financial details with a lender or mortgage broker, completion of a home inspection, or other details. These usually must be completed within five bank days of the agreement, but can occasionally be removed from the offer by the buyer signing a waiver. Be cautious agreeing to waive conditions as it may limit your ability for recompense if problems are discovered after you move in.
The amount of the deposit can vary depending on things like the price of the home and the location or neighborhood it is in. The deposit is usually paid upon acceptance of an offer and held in trust by the listing real estate company or a lawyer until it becomes part of the selling price on the day of closing.
Chattels and fixtures:
This can include anything which is not physically attached to the home such as stoves, refrigerators, washers and dryers, water heaters and furnaces. If you are not sure whether or not an item is included in the listing, be sure to include it in your offer. These items will usually transfer to the buyer as part of the sale, but it is better to be safe than sorry, so be sure to address each item that you want.
Other terms may include things like further visits to the property by the buyers before the closing date or statements by the seller that all appliances included in the sale will be in good working order on the date of closing.
Hopefully these tips will make you more confident going into the process of buying a new home. While real estate agents and lawyers can be a huge help, it’s also wise to be a well-informed consumer.