So, you have found your “dream” house. Stop right there. Emotion breeds carelessness — no house is perfect. Stay unattached, and follow these guidelines to get your new home for as little money as possible.
The first thing you need to do is get comps on what similar houses have sold for in your area. Chances are, this house is going to sell for what comparable houses sold for.
But armed with the right information, you might be able to get the price lower than the comps. First, find out why the house is on the market. There might be some extenuating circumstances that could work in your favor, such as …
- A job transfer: Transfers are typically date-sensitive, and most sellers would like to conclude a deal before they have to leave town.
- Job promotion: Use a seller’s good fortune to your advantage. If the seller is trading up, he or she will be less likely to stand firm on pricing.
- Estate sale: If the sale is being handled by the heirs, they are more likely to want to finalize a deal quickly and simply.
- Divorce: The sooner the property is disposed of, the sooner both parties can move on.
Also, the seller will have more incentive to sell if he or she already has signed a contract or already bought another home.
If you are looking at a short sale or foreclosure, factor how long it will take for the sale to go through. A short sale can take six months to a year to complete. You don’t know where the market will be in a year. Make sure your offer is low enough if the market goes down before you close.
Ready to make your offer? To be in the strongest bargaining position, you need to know how much you can spend. A pre-approval letter from a mortgage lender will give you an extra chip at the poker table.
Lastly, remember that real estate agents won’t necessarily squeeze the last bit of money out of a deal. If you’ve done your homework, you know why the house is being sold and what the market value is. Go ahead, make your offer — that dream house might just become a reality at a really great price.