Purchasing a home is not an easy task. The buyer and seller must agree to numerous terms, work with many professionals, and sign a large amount of paperwork. The complexities of a home sale can be intimidating, but it also means that there are numerous opportunities for negotiation.
The most important and visible aspect that is negotiable is the purchase price. However, this is far from the only thing that is negotiable. There are several other ways to improve the deal.
Here are five other things that first-time home buyers should feel comfortable about negotiating to get a better deal:
1. Closing Costs
Closing costs are the fees that are not included in the purchase price of a property. They include property taxes, insurance, appraisal, title, survey, and loan origination fees and can range from 2% to 5% of the purchase price of your home. You can negotiate with the seller to cover some or all of these expenses.
Of course, sellers are under no obligation to pay your closing costs. However, many sellers will agree to pay these costs out of the proceeds from their home sale to keep a real estate transaction alive.
During the due diligence process, you will schedule a home inspection to discover any potential issues with the home’s structure or condition.
As the property is already under contract, you have more negotiating power as the buyer. So, if problems are detected during inspections such as foundation cracks or mold in the basement, you can ask the seller to make repairs before closing, pay half the cost, or lower the sale price by an amount equal to the repair costs. Negotiating repairs can save you thousands of dollars.
Of course, as with any negotiation in a home purchase, ensure the details are spelled out in the home repair contract. You should also use the home inspection report as a checklist to ensure everything is ready before closing – especially during your final walkthrough.
3. Home Warranty
A home warranty is a protection plan for major appliances and systems in the home, such as the HVAC, plumbing, or water heater. Because virtually every component of a home has a limited lifespan, you should expect to pay for repairs at some point. If this happens soon after you purchase a home, it can be a significant financial burden.
So, one of the most common negotiations is for the seller to pay for the home warranty. Even if you do not anticipate any problems in the home appliances or systems during the first few years, negotiating the warranty can provide you with much-needed peace of mind.
4. Fixtures & Appliances
Different states have different standards for what items in a house should be included in a home sale. However, unless otherwise specified in the contract, light fixtures and major appliances are usually included.
As a buyer, you must clarify what is counted in the sale and what isn’t, especially for items like chandeliers and window treatments that may be a major attraction in the home.
You could raise the value of your offer in exchange for these fixtures and appliances, or you could change one of your contingencies to make it more favorable to the seller.
The negotiation also works in the opposite direction. If you do not want the seller’s old dishwasher, you can include a clause requiring them to remove the appliance before closing. This can save you time, money, and effort.
5. Move-In Date Or LeaseBack
The move-in date or a leaseback can be a valuable bargaining chip between you and the seller, whether you are on a tight schedule or have all the time in the world.
Offering the seller a flexible move-in date or a leaseback will be a huge incentive for a seller who is not quite ready to leave the home after the sale as they might be waiting to buy a new house, or might need a few weeks before their next purchase closes. If you rent out the home ensure to have a written rental agreement.
Negotiating during a home sale can be difficult, especially if you are a first-time home buyer. However, if you carefully consider what you can negotiate for, you may be able to reduce the overall costs of purchasing a home. Most importantly, work with a reputable realtor or financial advisor as you and the seller negotiate the terms of the transaction.