It’s rare for a seller to accept a first offer from a buyer. More often, the seller either rejects your offer in favor of another or responds to you with a counteroffer. A counteroffer is usually a one-page sheet that specifies the precise parts of your purchase contract that the seller doesn’t accept. Sometimes sellers write directly on the purchase contract, crossing things out and writing in new terms. There’s no reason for you to accept the terms of the counteroffer without making your own revisions. In fact, the counteroffer should signal the start of the actual negotiation process.
Home-Buying Negotiation Tactics
You have two somewhat conflicting goals in home-buying negotiations:
1. To get the best deal you can
2. To get the house
To achieve both, you’ll probably have to make at least a few concessions to the seller. Before negotiations begin, think about your priorities: where you’re willing to give and where you aren’t.
General Negotiating Tactics
- Give to get: By holding a hard line early, you can make it seem as if you care about certain terms that don’t really mean that much to you. Then you can let the seller have his or her way on those terms in exchange for other concessions.
- Focus on issues you can solve: If in each round of negotiation you focus on what you can solve rather than what you can’t, you can build up momentum and goodwill and make big issues seem smaller.
Negotiating Tactics for Specific Situations
Some tactics work best in certain circumstances.
In Buyer’s Markets
- Start low: By starting low, you can move the seller down significantly. The risk is that the seller might reject your first offer.
- Move bit by bit: By moving slowly, you may be able to wear the seller down closer to your target price. The risk is that the seller will get impatient and walk away from the negotiations.
In Seller’s Markets or When There Are Multiple Bidders
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- Avoid bidding wars: Don’t enter a bidding war unless you can absolutely afford it. Know your upper limit and stick to it.
- Avoid bidding wars: Don’t enter a bidding war unless you can absolutely afford it. Know your upper limit and stick to it.
- Make things easy: Though the seller wants a good price, he or she also wants the sale to go smoothly and easily. You can make things easy by:
- Increasing your down payment bid, which shows that you’ll likely get mortgage approval
- Being preapproved for a mortgage
- Offering to pay for repairs, as long as the house passes inspection
Late-Stage Negotiations
If negotiations hit a snag just as an agreement seemed within reach:
- Go halfway: If there’s a number or date that you and the seller can’t agree on, offer to go exactly halfway.
- Be bold: If the negotiations have started to inch along, you might be able to restore momentum by giving ground on one point and asking the seller to give on another. But if you’re too bold you may give up more than you need to.
