Before you begin and before emotions take over, settle in your mind the top price you really would invest in the house—a figure you will not share with the agent, unless it is someone you specifically hired as your own broker. Should you expect to pay full asking price, or is there a formula for the amount of bargaining built in by the sellers? It all depends. Homeowners who hate haggling may have listed their house at a rock-bottom price with no room for flexibility. Others may add a 5 percent cushion to what they’d really take. The sellers’ circumstances affect price. They may be under some of the pressures mentioned in the last chapter. Elderly homeowners, on the other hand, are often in no hurry to move. They may have emotional ties that make it difficult for them to view their property impartially. If a house has been on the market a long time (more than five months), the buying public has voted that it isn’t worth what the sellers are asking. In that case, don’t offer full price. On the other hand, don’t fool around if you’ve stumbled on a hot listing, one that has just come on the market and is uniquely appealing or noticeably underpriced. If there is a possibility of several offers within the next day, consider coming in somewhere over asking price. This gives you an advantage against competition. It sounds suspicious when a broker recommends such action; this is where it helps if you already know and trust the agent. New home offers are usually negotiable only when the house is one the builder has a vested interest in unloading, such as standing inventory. Builders deal in volume, operating on a much smaller profit margin than resale sellers, so there is generally not as much bargaining power here. You may find a builder most negotiable on soft costs (those that have some built-in profit), such as design center options and upgrades. Contributions towards your closing costs if the lender is their in-house or preferred lender may also be a point for negotiation, instead of on sales price, which may affect future appraisals in a neighborhood just beginning to establish values. |
