The 4 Most Important Parts of Home Buying Negotiations

Posted by Jerad Cox on Saturday, July 18th, 2015 at 2:58pm.

real estate negotiation

Prime Edmonton Real Estate -It is important that home buyers know that there are only a few main area for negotiation, unlike the commonly viewed belief that "everything is negotiable". This hasn't always been the case, but in today's real estate market, there are really only 4 main areas that a buyer must agree on for a deal to be completed.

These 4 items are:

1) Price - Of course! Price is often the most important area to negotiate on. Sellers want to make sure that they can the highest price possible, while buyers always look for the lowest price possible. A note to home buyers: trying an offer that is 90% of list price or lower is a non-starter. The only exceptions to this would be a distressed property or a property that is statistically overpriced given the comparables in the market.

2) Conditions and Condition Dates - The standard home buyer's conditions on the Purchase Contract are financing, home inspection, condo documents (for sales of condos only) and sale of the buyer's home. It is important that a home buyer always has the financing condition in the contract, even if they have been pre-approved by their lender. There is little to no risk to having it included, but not having it included can result in a home buyer losing their deposit monies if they are unable to get a mortgage. It is also important to note that you can either state that your condition is satisfied OR that you are waiving the condition.  

3) Possession Day - This is often the trickiest term to negotiate because usually either the home buyer or home seller ends up either a) owning 2 homes at the same time during the transition, or b) having no home to stay for a few days. It is good to know what scenario of those two you can

4) Home Appliances - These are sometimes a contentious issue when it comes to the negotiation. Sometimes sellers have a special attachment to certain appliances, or feel that they will not get equal value out of brand new appliances if they include them. Make sure to look at the Good Included section of the property highlight sheet before discussing what you want to have included. If a home buyer adds things that are not on that list, there may have to be alterations to price.

There is also an area in the contract to write in secondary terms. I have seen everything from backyard patches to be re-sodded by the seller to the exclusion of a window covering in a single room because it sewn by the seller's grandma. It is wise for home buyers to try and shy away from adding things to this area  unless they are willing to make concessions in other areas.

As with all types of negotiations, home buyers will not always get absolutely everything they want. The key is to prioritize their importance of each area and know that some of the lower prioritized things may need to be used as leverage tools to achieve their wants with the big things like price. Also remember that time and energy has a currency - and that saving a day or two here or an appliance there may be worth it in the long run.  The key for home buyers is that they are careful what they ask for in negotiations - because what you ask for may end up costing you a lot more than you think!

1 Response to "The 4 Most Important Parts of Home Buying Negotiations "

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Posted on Saturday, July 18th, 2015 at 4:09pm.

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