When negotiating the price of real estate, your tactics will often depend on the state of the market. As a general rule of thumb, the leverage tends to be in favor of sellers in the summer and buyers in the winter. However, the economy also makes a difference. Regardless of the season, the guide below offers tips for getting into the home you’ve got your eye on.

How to Negotiate in a Buyer’s Market

In a buyer’s market, there are more homes for sale than the number of people looking to buy a house. As a result, you are less likely to have to bid against another family for the same property. Your first offer should, therefore, be a little under the closing value for similar homes sold in the area. For example, if a comparable property recently sold in the $600,000-range and the owner is asking for $625,000, offer $590,000. The seller will likely come back with a counteroffer, but this still gives you room to negotiate while coming in at or below market value.

You might also bring up negative attributes about the house that could warrant a lower asking price. An unfinished basement, run-down cabinetry, or necessary home repairs can form part of your argument for a lower sticker tag. Alternatively, you may also ask for the terms to be adjusted. This could involve the seller paying your closing costs, conducting any requested repairs, or maintaining flexibility with the closing date.

How to Negotiate in a Seller’s Market

In a seller’s market, the property owner maintains the upper hand. In this case, your goal should not be to come in under the list price but to secure the house over any other interested candidates. Being preapproved for a mortgage or coming in with cash show that you’re ready to make an offer and aren’t just in the browsing stage. You can also talk to your real estate agent about making a larger earnest money deposit. Since you're going to pay it anyway at closing, doing so upfront can be an easy way of standing out to the seller.

Avoid making small demands or requests in your offer letter and try to establish a social connection to let the seller get to know you. To get an extra leg up on the competition, have your real estate agent call the listing agent for further advice or input on what the seller is looking for.

 

Looking to buy a house in the Denver Metro area? Contact the expert real estate team at Open Real Estate. Based in Lakewood, CO, these professionals can help you find a new neighborhood or home to suit your budget and lifestyle, as well as negotiate the best deal possible. Give them a call at (303) 232-1111 to schedule a house hunting consultation or take a look at their listings online.