If you’re a first-time home buyer, you’re probably wondering what you can do to get a home at a good price. Home prices in the U.S. are higher than normal, and it may be some time before they come down again. Therefore, if you’re looking to get a good deal, you’ll need to be strategic about the methods you use when negotiating with a seller. Here are some tips you can use to negotiate effectively.
Negotiating Tips for First-Time Buyers in 2023
At the beginning of 2022, home price averages in the U.S. reached a record high of $348,079, an increase of approximately 29% since the beginning of the COVID-19 pandemic. While home prices have declined steadily in the past few months, they’re still higher than normal, and experts predict this trend is likely to continue well into 2023.
Therefore, if you’re a first-time home buyer, your ability to purchase a home at an affordable price will likely depend on your negotiating skills. Here are some strategies you can use to increase your odds of success and negotiate effectively:
Get Prequalified
Before you start shopping around, it’s important to get prequalified for a mortgage. This will give you a clear idea of what you can afford, and which homes are within your reach. Additionally, having a prequalification letter from your lender may give you more bargaining power. You can submit your letter as part of your offer on a home. This provides the seller with the confidence that you will be able to secure financing and see the transaction through.
Make a Good Offer
When you find a home you love, you’ll want to make a strong opening offer. Start with a reasonable, but slightly lower offer, to leave room for negotiation. If there are multiple offers on the home, you may want to consider submitting an offer at or above the listing price.
Keep an Open Mind
It’s important to keep an open mind and be willing to compromise. You may be eager to purchase the home, but keep in mind that the seller has their own needs too. They may be more likely to accept an offer from someone who’s flexible and willing to work with them. You may need to compromise on different contract terms, a different closing date, or other details to reach a mutually beneficial agreement.
Hire a Pro
Perhaps negotiating isn’t your forte. Don’t worry, you can still be successful as a first-time home buyer. Consider hiring an experienced real estate agent to handle the negotiations for you. A professional can guide you through the process and advise you on how to submit an offer that gets accepted.
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