How To Negotiate Price When Buying A New Home
When you find your dream home, you may be ready to pay any price for it. Now, the seller is counting on you falling in love and may not want to budge on the price knowing that.
This means that you have to really get your negotiating skills fine-tuned. Otherwise, you could be overpaying for your home, no matter how much you love it. And a first time home buyer may assume that the price is firm when the reality is it could be quite flexible.
The trick is to use some soft and hard skills to be able to knock some dollars off of the price. In this article, we will give you some tips on how to do just that.
Get the warranty paid
Something a first time home buyer may not be aware of is that there is a warranty for home repairs that will cover the first year of any faulty items. Further, the warranty is usually paid for by the seller.
If it isn’t brought up then the buyer should make sure that this is something the seller intends to cover. It’s only a matter of $600 to $800 but with the other items that we will go over, it can add up to significant savings.
Usually, when the home inspector does the once over, there will be things that come to the attention of the buyer that needs to be taken care of or are not at 100%. What’s included in a home inspection? It generally covers the roof and any structural damage that may be present. Plus, the plumbing and electrical fixtures, HVAC, and even the interior and exterior of the house.
If there are some things that don’t look like they need immediate repair then the home warranty may cover the repairs if they do end up failing during the first year after the purchase.
Lower the points
The bank may have an idea of what they think the house is worth, but they are obviously biased. Come armed with information and you can generally lower the points of your mortgage considerably. Look at what other similar houses in the area are selling for and what the condition of the house is.
You may be able to get the mortgage a point or lower than what the bank had offered. And this can reduce your interest payments considerably over the course of the mortgage.
Have your lease bought out
Another tactic to save money that not many people think about is to ask the seller to buy out the remainder of a lease that you may be paying to speed up the closing process. Many first time buyers are renting and are trying to time their closing date to coincide with the time they are moving out of the rental.
It’s in everybody’s interests for this process to go quickly. The seller may also be waiting for the money from the sale to buy themselves so they may be willing to pay off whatever remains on your lease.