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How to Negotiate House Price as a Buyer


Once you’ve finalized your purchase offer, the details are presented to the seller in a contract. By signing off on the contract, you’re legally committing to purchase the home, provided all the conditions are met.

It’s rare for an initial contract to be accepted. Usually, your first offer is the starting point of negotiating with the seller. Here’s everything you need to know when negotiating as a homebuyer.

What can you negotiate when buying a home?

What is up for negotiation depends on your loan requirements and what the seller is willing to cover. Common home negotiation items include the home’s purchase price, repairs, closing costs and the closing date, among others.

For example, VA loans allow up to 4% of the loan amount in seller concessions, while conventional loans usually range from 3% to 9%, depending on the down payment amount.

Home Offer Negotiation Outcomes

Each offer can take one of three routes:

  • Acceptance: The seller agrees to each item presented in the contract, and the parties move ahead to loan processing, underwriting and closing.
  • Counteroffer: When sellers make a counteroffer, they’re usually showing interest but looking to tweak the terms. A seller’s counteroffer will suggest changes to the original offer, such as a higher price or quicker closing date. Once prepared, the counteroffer is sent back to the buyer’s agent. Buyers have the option to accept the counteroffer, counter the counteroffer or simply walk away from the deal.
  • Rejection: A seller can reject your initial offer outright. Some sellers take this route when an offer is unnecessarily low or contains unrealistic terms. In this situation, buyers are free to make another offer to the seller or to move on to a new property.

The negotiation process continues until an agreement is made or until one party decides to walk away. If you’re headed into the negotiation process, keep a level head. Real estate negotiations can be tough, even for seasoned real estate agents.

The Importance of a Real Estate Agent

Some prospective homeowners are under the impression they don’t need a real estate agent anymore. However, this couldn’t be further from the truth. A real estate agent's role transcends beyond showing potential homes — they can be pivotal when negotiating home prices and formulating compelling offer letters.

They are skilled in professional negotiation, acting as an emotional buffer and intermediary between you and the seller. Their extensive knowledge of market trends and legal processes may help buyers navigate through any complexities.

Agents provide strategic advice on property inspections, repairs and the closing process, alleviating much of the stress and uncertainties buyers often face. They have a network of professional connections and can offer great insight into local communities that could help you secure your dream home.

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4 Tips For Negotiating a Home Purchase

1. Understand the Seller’s Motivations

See what your agent can learn about the owner’s reasons for selling. It’s common for owners to want to sell their homes as quickly as possible, but some may be especially anxious to do so.

Perhaps the seller has already purchased another home and is struggling to pay both mortgages. Maybe the owner wants to complete the sale prior to a new school year. You might be able to use the seller’s motivation to your advantage when negotiating.

2. Don’t Limit Your Options

Even if you fall in love with the first home you tour, it’s in your best interest to continue looking at homes. You don’t want to enter negotiations with the opinion that you simply “must” have a particular home. That philosophy could put you in a weaker position than your seller.

Your emotions will probably run high, but you can keep them in check with a backup plan. If negotiations fall through, you can either resort to your backup or resume your house hunt. Rest assured, there’s another home out there that’s a great fit for you.

3. It’s Not a Competition

During the heat of negotiations, it’s easy to see the seller as “the bad guy.” It’s common for a buyer to feel that defeating the seller is more important than getting a good contract in place.

But don’t turn negotiations into a battle of egos. Do your best to remember that you’re making an investment, not preparing for a boxing match. A seller often has the same motivations as a buyer: to get the best deal possible. Don’t take it personally if the seller doesn’t agree to all of your requests. If the home is within your budget, it meets your specifications and you’re excited about being the new owner, you can probably let a few demands slide.

4. Show You’re Preapproved

Don’t forget to let your seller know you are a qualified buyer. Real estate contracts can fall through because a buyer cannot get financing. For this reason, sellers often hesitate to work with a buyer who hasn’t been preapproved.

Make sure your agent notes your preapproval status in your initial offer. Sellers may be more willing to work with a buyer who looks like a safe bet to close.

How Much Can You Negotiate on a House?

How much you negotiate heavily depends on a couple of factors. Market conditions and the home’s condition are two of the most important. In a seller’s market, you might be able to negotiate a few thousand dollars or certain contingencies. While in a buyer’s market or with a highly motivated seller, you could negotiate more than 5%.

It’s important to look at comparable homes in the area that sold for a similar price. The condition of these homes can help negotiate repairs or even encourage sellers to reconsider the original asking price.

Lean on your real estate agent for help when it comes to navigating the negotiating process. Try to be flexible without compromising your budget or needs, and don’t be afraid to ask for help.

About Our Editorial Process

Veterans United is recognized as the leading VA lender in the nation, unmatched in our specialization and expertise in VA loans. Our strict adherence to accuracy and the highest editorial standards guarantees our information is based on thoroughly vetted, unbiased research. Committed to excellence, we offer guidance to our nation's Veterans, ensuring their homebuying experience is informed, seamless and secured with integrity.

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