Homebuying negotiations beyond the price

Question: Dear Kari, My boyfriend and I are first-time homebuyers, and we're curious how people manage to get sellers to cover buyer's closing costs or even include furniture in the sale. What are the key strategies for achieving these outcomes? Answer: When buying a home, it's wise to understand that negotiations might extend far beyond just the purchase price. Many elements of the contract are open for discussion, allowing buyers and sellers to customize the terms of the sale. While most folks focus on the price and a one-year home warranty, several other crucial items can be negotiated to secure a better overall deal. A seller's willingness to be flexible often depends on whether it's currently a buyer's or seller's market, as well as their personal motivations for selling. Keep in mind negotiating items beyond the home price can sometimes complicate the transaction and potentially deter sellers, but it can absolutely be worth attempting. Here are some possible negotiation opportunities for homebuyers: Buyers can often negotiate with the sellers to cover some or all of their escrow fees. These are various costs paid to third parties, like a title company, that facilitate the sale and protects you with title insurance and other services. Typically, this negotiation involves a slight increase in the sales price with the sellers then crediting that amount back toward your overall closing expenses. This arrangement can be a major advantage for buyers by significantly lowering your out-of-pocket costs at closing. · The amount of your earnest money deposit is completely up for discussion. Even though some sellers might prefer a larger sum, you can always talk it over and come to an agreement. · Negotiating a rent-back agreement if the sellers need extra time to move out of the home, you can allow them to remain in the property for a specified period after closing, paying a set fee to you, the buyers. Essentially, the sellers become your tenant, and you become their landlord through a short-term lease. This arrangement significantly benefits sellers by helping them avoid temporary housing and reducing their moving stress. In most cases, when sellers are granted a rent-back, they're often more inclined to accept your offer or agree to other favorable terms or incentives. · Ask if the sellers are willing to pay for a mortgage "buydown," a one-time fee at closing that would lower your mortgage rate and monthly payment, either for the full duration of your loan or for a few years. · If you're eyeing any of the seller's furniture or decor, consider including personal property in your home offer. Beyond standard appliances, you can negotiate for various other items you'd like to keep. For instance, a dining room table, BBQ, swing set or even yard fountains. You can bundle these into your overall offer, creating a possible win-win scenario where you get desired items and the sellers avoid the hassle of moving them. · Down payment is the initial lump sum you pay toward the home's purchase price, typically ranging from 3% to 20% of the purchase price, and this amount is negotiable. · If the property is in a community with a homeowner's association, consider negotiating for the sellers to cover the HOA fees for a certain period. · Request the sellers have the home professionally cleaned before the closing. · Ask for a paid home warranty, which is a contract for one year that provides some coverage for repair or replacement of some major systems and appliances. Make sure to read the limitations in the fine print. · Buyers can ask for credits for prepaid items such as homeowner's insurance, appraisal fee, or pay for some of the buyers' taxes that are due at the closing. · The purchase price is the most obvious point of negotiation, and you can offer a price lower or higher than the seller's asking price. This is entirely at your discretion as the buyers. · It's crucial to include buyer's contingencies in your home offer. These are conditions that must be met for the purchase agreement to proceed, acting as vital safeguards for you. If these conditions aren't fulfilled, the deal is canceled and you'll receive your earnest deposit money back from the title company. · Financing contingency, which means the deal depends on you securing a mortgage for the home. · An appraisal contingency provides the buyers protection on their investment. If the home's appraisal comes in at a lower price than the agreed-upon purchase price, this contingency gives you the option to withdraw from the deal or renegotiate the price with the sellers. · A home inspection contingency is a crucial safeguard for buyers, protecting you from unexpected home issues that might be discovered with inspections. It allows you to cancel the deal without penalties or you could also request the sellers make repairs or credit money to you through the escrow or reduce the purchase price. · A clear title contingency protects the buyers by ensuring a clear title to the home and allows buyers to back out of the deal if the issues cannot be resolved. · A home sale contingency is for buyers who need to sell their current home to finance a new purchase. This means if their existing home doesn't sell within the specified timeframe, the deal will be canceled. Making a strong home offer requires several important steps. To give yourself the best chance and stand out from other buyers, it's essential to partner with an experienced local real estate agent. They'll guide you through the entire process and help you negotiate successfully. A savvy agent knows how to pinpoint what's negotiable and how to develop a smart strategy for a winning offer. Negotiations can be intricate and influenced by various factors, so approaching them with a clear grasp of the market, the home and the seller's motivations is vital. Remember, every negotiation is unique, and while what works in one situation might not work in another, you'll never know unless you ask the sellers. I wish you the best of luck.