5 Areas To Negotiate When Buying or Selling a Home

5 Areas To Negotiate When Buying or Selling a Home

If you’ve bought or sold a home recently, you know that there are a lot of fees. Many of these fees might come as a surprise and weren’t money you were planning to spend. No matter what side of the table you’re on, you probably want to ensure you’re keeping as much of your hard-earned money as possible. That’s why you shouldn’t be afraid to negotiate during a real estate transaction. Let’s look at some areas to negotiate when you’re buying or selling a home.

Purchase Price

The most obvious area you can negotiate is the purchase price. We always look at comparable homes in the area to see how much they’ve sold for to see if the asking price for a particular house is reasonable. Depending on the real estate market conditions, we might advise our clients to offer less than the seller is asking and work with the seller’s agent to make an agreement.

As a seller, seeing an offer for less than the amount you were asking for may seem disappointing, especially since, up until recently, homes were selling above the asking price. It’s always smart to stay current with the market in your area so you’ll be prepared for the types of offers you might receive. This knowledge will keep you informed and in control during the negotiation process.

Home Repairs

If you’re buying a home that has been lived in, it’s safe to assume that something will be coming close to the end of its working life or already broken. We always tell our home buyer clients not to buy a home without getting an inspection first. The inspection will uncover any issues with the home that you may not notice when you’re out house hunting. If the inspector sees something isn’t working, the buyer can negotiate repairs; however, asking the seller to fix or replace everything in the home is unreasonable.

Buyers should be strategic when asking for repairs to be done and consider how important each item is to them and how much it would cost to have to repair it themselves. If the cost is too much for both buyer and seller to deal with, we can sometimes negotiate money off the purchase price of the home or ask for an escrow holdback. An escrow holdback is a portion of the seller's proceeds that are held in an escrow account to cover the cost of repairs. This way, the seller can use equity from their home sale to make repairs instead, which is sometimes an easier option for them.

Closing Date

It might not seem like a big deal, but the closing date is another area that can be negotiated. For buyers, the biggest hurdle most of them have to face is getting the funding for the home they want to buy. Usually, 30-45 days is the amount of time they’ll need so they will probably base the closing date on that.

Buyers could also offer to help a seller a little bit by offering to close earlier or later, depending on what the seller needs. Sellers need to consider the date of closing since, depending on where it falls, they may have to make an extra mortgage and insurance payment.

Closing Costs

Buyers can expect to be charged 2-3% of the home’s purchase price as closing costs. Closing costs cover fees charged by the lender for their hard work to get the loan approved. But did you know that the buyer can negotiate with the seller to have them cover some or all of those fees?

Having the seller cover the closing costs can sometimes be the difference between a buyer being able to purchase the home or not. If a seller is reluctant to cover those fees, the buyer can offer a higher purchase price while getting a percentage of the fees covered so that the seller will still pocket the same amount of money.

HOA Fees

If you’re buying a home with an HOA, you can expect there to be fees. Sometimes these fees can be pretty steep – and when you’re already paying thousands of dollars, it might be hard to find room in your budget to cover these HOA transfer fees.

Buyers and sellers can work together to determine who covers HOA fees. It’s common for both parties to split the fees, but again, this area can be negotiated.

If you have questions about the New Mexico real estate market, we are here to help! We represent buyers and sellers and would love to help you with your real estate goals.