How to Bargain For the Best Price on a Home
When looking for the best deal on a foreclosure, one has to be methodical in the home search and vigilant with the negotiations. With today’s real estate market, this is more possible than it ever has been before. Below are some good tips for getting the best price that home buyers should follow to help get the best price possible for the home.
Don’t Be Emotional
1. Do not express too much emotion with the home. By making a note of all of the flaws, as well as some of the positives of the home, the seller (in the case of a foreclosure, the bank) will understand that you are able to pass up the home if the price is not lowered or if the problems are not rectified. This is a technique that people have been applying to vehicle purchases for quite some time and has proven very effective in lowering prices or raising the number of options and perks when negotiating for the best deal.
Don’t Get Attached
2. Understand that there are other homes on the market. If you feel the house is not worth the price that it is going for, do not feel that you have to take the house for that price. Walk away from the house and look for another home. The ability to walk away is often a wake-up call for banks selling foreclosures and over time, may cause them to lower the price of the house. If they do not, they will often lose sales. Banks don’t want to own real estate. You, however, will be able to move on to a better house and better purchase.
Don’t Ask for Repairs
3. In a foreclosure purchase, you will want to stay away from asking for too many repairs. When buying a home from an individual, you can negotiate for changes to the house, rather than the price of the house. Banks, on the other hand, would rather simply get the home sold at a lesser price than hire contractors. The real estate agent that has the listing will also not want to “float” the costs of the repairs. When real estate brokers get foreclosure listings on homes, they pay for repairs up front, and the banks will generally catch up with “the float” after 90 days. There are exceptions for things like:
- Rekeying the home
- Yard Work
In those instances, large organizations such as Fannie Mae will have contracts to have these things done across the country. The banks are aware of the work that needs to be done to the home and will adjust the price accordingly. For an example, getting a new roof on the house can cost ten thousand dollars. As the bank for the reduction of $10,000 or for them to replace the roof. This puts a dollar amount on the repair.
4. Look to make changes to the negotiation such as the seller taking the closing costs or other fees. This can considerably lower the price of the house purchase will not lowering the price that the house is sold at. It is all about bargains when searching for homes for sale, and negotiations can help considerably with this. By getting the seller to cover the closing cost, the total price that the homebuyer pays is less and banks generally get better deals than the general public for closing services, so its a win-win for both the buyer and the bank.
Use an Experienced REALTOR
Using an experienced REALTOR who has extensive knowledge of working with foreclosures can be of huge benefit. There is a ton of additional paperwork in the purchasing of a foreclosure as opposed to a standard home. Read the agents reviews, talk to past clients. The best real estate agents are those that are familiar with the addendums and amendments that banks attache to the purchase agreement and see far less issues.