After spending time on the internet and with your realtor, you’ve finally found the house of your dreams. Congratulations! Now it’s time for the challenging part: convincing the sellers of your dream home to accept your offer. Home inventory these days is tight, making today’s housing market especially challenging for buyers. Over 23% of homes sold in the past year sold for over list price, according to online real estate brokers, and the current seller’s market is likely to blame.
So, with multiple buyers clamoring over the same property (potentially the one you’re interested in), how do you go about negotiating to buy a house? The good news is that you can still close the deal, but your offer will need to be competitive. These four tips can help you stand out from the crowd as you try to be the winning bid on your dream home.
1. GET PRE-APPROVED
Whether this is your first home purchase or you’re a seasoned veteran, getting pre-approved for a mortgage is a wise move. Sellers who know they have a desirable property likely won’t want to waste time negotiating with potential home buyers who haven’t shown they’re able to get a mortgage. Being pre-approved is a sign to the buyer that you’re prepared and ready to buy and close on a home quickly.
2. FLEXIBILITY HELPS
Sellers may not always be sure of their specific timetable. For example, if they’re building a house and encounter a delay, they may need some wiggle room around the close or move-in date. If you can be a little flexible, sellers may take notice, especially if they’re working to time the purchase of their next home or condo with the sale of their current home. Date flexibility may hold a higher weight than sale price with these sellers.
3. PERSONAL NOTES CAN HELP
Buying and selling a home is most definitely a business transaction, but sellers with a long history at a property develop an emotional connection to the house. Including a handwritten letter or note with the offer letter detailing why you like the property and what you plan to do with it can put the seller at ease. For example, if an elderly couple is selling a historic home that they’ve lived in for more than 40 years, and you express wanting to raise a family and preserve the home’s history and character, this may help you stand out from other potential buyers who plan a total remodel. While this tactic may not help you move the price needle, if two offers are similar, it might give you an edge.
4. PUT DOWN A SUBSTANTIAL DOWN PAYMENT
Likewise, offering a substantial down payment is a strong home-buying strategy. Review your finances with a professional and go to the table with the highest down payment you can comfortably offer. Be prepared to move forward with this amount if you want your offer to rise above the others since cash is king—it can show that less time or effort may be involved when going through the financing process, which could be attractive to the seller.
Finally, it’s important to know when to walk away from what you think is your dream home. While it’s easy to get caught up in negotiating, know your price ceiling and don’t bust through it. If you don’t get the house, it’s not a big deal—there’s probably another perfect home right around the corner.