1) The reason that they are selling at that price is that they heard that a home that was not as nice as theirs sold for $5000 more than they are asking. They may have no basis for asking that amount. They heard it through the grapevine and never verified the truth. The truth was that the other home sold for $15,00 less and they gave $10,000 in sellers concessions. So actually the home sold for $25,000 less.
2) How much the seller put into the house. The seller bought it for $150,000 and put another $80,000 into the home. Even though similiar size, style homes with the same updates are selling for $200,000... the seller wants $230,000
3) How much cash he needs for his next home. The seller needs $50,000 cash to buy his next home. He owes $120,000 so he wants to sell it for $170,000 even though the highest home in the neighborhood sold for $162,000 and was nicer than the seller's.
Many times the asking price is more than comparable homes that have sold recently and in the same area.
Sellers get stuck on their price but give less thought to Closing costs and Repair costs. By asking for seller's concessions (sellers paying the closing costs) it reduces the sales price. It can be anywhere from 1-6% of the purchase price. Usually it is in the range of 2-3% of the purchase price. If the seller knows that they can get the house sold but you, the buyer needs help with the closing costs sometimes they are willing to contribute seller's concessions to get the deal done.
Another way is for your agent to point out the repairs that are needed when submitting the purchase price. By stating that were are offering $10,000 less because the furnace and the roof need replacing makes an lower offer less offensive. The seller knows the roof needs to be replaced but just didn't want to spend the money. To him he can sell the house and not put any money out to replace the roof. On paper the seller comes out the same but it's easier on the seller's pocket book and mind.
True market value is determined by what buyers are paying right now for similar homes in the same neighborhood. Your real estate agent should provide you with the information of homes that have sold lately with similar features, style and size. This is how you should come up with the price you offer.
In every negotiation a home Buyer must decide:
1. What to give up on and or what to trade off
2. When to concede or
3. How long to hold out for a better home buying deal...
TIP 1
What is your buyer's motivation to sell. This is a key on who "may negotiate easier, faster, and give a bigger price reduction".
A.) Is the home empty? Have the seller's already relocated or going to relocate. They have to sell the home. They may be willing to take a lower price to get where they are going to and be able to buy a new home.
B) Is it a divorce? Are the people living in seperate rooms or only one living in the house? Are the children graduating from high school and it is a single mom living there? The child support may be ending. The couple may just want to get away from the other spouse and get on with life.
C.) Is the home empty? Are there walker's, medical supplies/hospital beds/ raised toilet seats? Does it smell or look like your grandmother's house. It may be an estate home being sold after a death of a family member. Most heirs want to get there share of the money and get done with selling the house.
D.) Increased income. A big pay raise or a big promotion. Somebody upwardly mobile may not argue about price as much if they are getting there dream home.
On the opposite side. These people will be harder to deal with.
A.) A growing family. A family that has to buy a bigger home because they have outgrown this one.
B.) People living
C.)
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Tip 1: 