Finding the perfect home is just the beginning. Once you’ve discovered “the one,” you’ll need to navigate the complex world of negotiations to ensure you get the best possible deal. There are a million books written on mastering negotiations and we’ve read more than a few. In this article, we’ll take a look at the five key points to mastering negotiations as a buyer laid out in Ninja Selling.
Selling instead of buying? Check out our article looking at the same things from a seller’s perspective: The 5 Key Negotiation Points For Sellers To Maximize Their Home Sale.
Understanding these five negotiation points will empower you as a buyer and potentially save you thousands of dollars while securing better terms. Let’s explore each point in detail and see how they specifically impact you as a buyer.
Price: Go Beyond The Numbers
While price might seem straightforward, it’s actually a multifaceted negotiation point with several components to consider:
What Buyers Need To Know:
- The listing price is almost always negotiable, but your leverage depends on market conditions
- In a seller’s market with limited inventory, your negotiating power may be limited
- In a buyer’s market with abundant inventory, you have more room to negotiate price
- Price negotiations should be informed by comparable sales (comps) in the area, not just your budget
Strategic Approaches:
- Start with a strong but reasonable offer based on comparable properties
- If the market favors buyers, consider offering below asking price
- Be prepared to justify your offer with market data (this is a step for your agent, but the price needs to be justifiable to begin with)
- Remember that your initial offer sets the tone for all further negotiations
Example: Sarah and Michael found a home listed at $425,000. After researching comparable sales in the neighborhood with their agent, they discovered most similar homes sold for $405,000-$415,000. They made an initial offer of $400,000 with a pre-approval letter attached. The seller countered at $415,000, and they eventually settled at $408,000 – a $17,000 savings from the original listing price.
Terms: The Framework Of Your Agreement
Terms define how the transaction will proceed and often have significant financial implications. There are multiple terms to consider and finding the right balance between all of them can make a huge difference. Knowing which terms are most important to you can help your agent show you ways to structure your offer for the best results.
What Buyers Need to Know:
- Terms include financing conditions, earnest money amount, option fee, and closing costs
- Favorable terms can sometimes be more valuable than price concessions
- The strength of your financing affects your negotiating position
- Sellers generally prefer all-cash offers or strong financing with minimal contingencies
Strategic Approaches:
- Get pre-approved for a mortgage before making offers
- Consider increasing your earnest money deposit to show commitment
- Negotiate for seller concessions toward closing costs when appropriate
- Request longer inspection periods if you anticipate needing specialized inspections
- Be flexible on terms that matter less to you but might matter more to the seller
Example: Jason was buying his first home and couldn’t afford both the down payment and closing costs. Rather than negotiating solely on the $300,000 asking price, he offered full price but requested ,000 in seller concessions toward closing costs. The seller accepted, allowing Jason to complete the purchase with his limited funds while the seller still received their asking price.
Closing And Possession Dates: Timing Matters
The when and how of property transfer can be crucial negotiation points that affect both parties. Don’t instantly assume that the closing data and possession dates are the same – and consider being flexible with the possession date. Sometimes a seller lease back can be a strong negotiation tool.
What Buyers Need To Know:
- Closing date determines when funding must be ready and final paperwork signed
- Possession date determines when you actually get keys and can move in
- These dates don’t always coincide – you might close on one date but take possession later
- Flexible timing can be a powerful negotiating tool
- Your lease expiration date, if applicable, should factor into your timing requests
Strategic Approaches:
- If the seller needs to find a new home, offering a flexible closing date or rent-back agreement could strengthen your offer
- Request immediate possession if the home is vacant
- Negotiate a per-day rate if the seller needs to stay in the home after closing
- Coordinate closing with the end of your current housing arrangement when possible
- Use closing date flexibility as a bargaining chip for price concessions
Example: Daniel and Emma made an offer on a home where the sellers hadn’t found their next property yet. Rather than competing solely on price with other buyers, they offered a 60-day closing with an optional 30-day rent-back period. Their flexibility on timing won them the house despite not being the highest bidder, saving them approximately $15,000.
Inclusions And Exclusions: What Stays And What Goes
This negotiation point covers which items remain with the property and which the seller takes. These can range from refrigerators to curtains – knowing which items stay and which go allows you to use these items as bargaining chips in your negotiations.
What Buyers Need to Know:
- Standard inclusions vary by region but typically include attached fixtures
- Refrigerators, window treatments, and outdoor items may or may not be included
- Sellers sometimes remove items buyers assume will stay
- Smart home devices and mounted TVs often create confusion (but are specifically covered in our Texas contracts)
- Some sellers might be willing to include items not originally listed
Strategic Approaches:
- Clearly specify all desired inclusions in your offer
- Request an inventory of included items with your inspection
- Pay special attention to gray-area items like mounted TVs, custom light fixtures, and garden features
- Consider requesting items that complement the home’s aesthetic
- Be willing to compromise on minor items to gain concessions on major points
Example: Amanda fell in love with a home featuring custom window treatments, a mounted kitchen TV, and high-end washer/dryer. The listing didn’t specify these items would stay, but rather than assuming, Amanda explicitly included them in her offer. The seller agreed to leave the window treatments and kitchen TV in exchange for a quicker closing date, adding approximately $3,500 in value to Amanda’s purchase.
Contingencies: Your Protection Plan
Contingencies provide vital protection by allowing you to back out of the deal or renegotiate under specific circumstances.
What Buyers Need to Know:
- Common contingencies include financing, inspection, appraisal, and home sale contingencies
- Each contingency provides a specific protection but can also weaken your offer
- Waiving contingencies strengthens your offer but increases your risk
- Market conditions affect which contingencies you can reasonably include
- Some contingencies can be modified rather than completely waived
Strategic Approaches:
- Never waive contingencies without understanding the risks
- Consider shortening contingency periods rather than eliminating them entirely
- Use inspection contingencies (in Texas, this is one of the reasons we have an option period) to negotiate repairs or price adjustments
- Include an appraisal gap coverage clause if you’re willing to pay above appraised value
- Be strategic about which contingencies matter most to your specific situation
Example: In a competitive market, Chris and Taylor wanted their offer to stand out without taking on excessive risk. Rather than waiving their option period entirely, they offered a short window for the option period, because they knew they could get an inspection done right away. This gave them protection against major issues while not dragging out the unknown time off-market for the seller. Their strategic approach to contingencies helped their offer get accepted despite not being the highest price.
Pulling It All Together: The Art Of The Win-Win Deal
Successful negotiations address all five points as an interconnected package. Strength in one area can offset weakness in another. For example, a lower offer price might be accepted with a clean offer (minimal contingencies) or optimal closing date for the seller.
Remember that your goal should be creating a win-win scenario where both you and the seller feel satisfied with the outcome. The best negotiations leave both parties feeling they’ve achieved their core objectives.
As you prepare to make an offer on your dream home, consider how each of these five points fits into your overall strategy. Prioritize what matters most to you, but remain flexible on points that are less crucial to your situation.
Your Next Steps: Professional Guidance Makes All the Difference
While understanding these negotiation points is valuable, having an experienced real estate professional by your side can make the difference between a good deal and a great one. At The Howell Group, our agents are trained in the Ninja Selling approach and negotiate many successful transactions each and every year.
We know when to push for better terms and when to compromise to secure the home you love. We’ll guide you through each of these five negotiation points with expertise and personalized advice tailored to your specific situation.
Ready to start your home buying journey with confidence? Give one of our agents a call today, and let’s work together to negotiate the perfect deal on your dream home.
