Top 10 Tips for Getting the Best Deal
Looking for a few hints and tips for getting the best deal when buying a FSBO property?In a buyer's market, where lots of homes are for sale, the key is to know how much you can get away with. Start by asking questions. Can the price be reduced? Can you try to negotiate some repair costs? Can you find homes where the For Sale by Owner seller is desperate to sell? Can you get more inclusions?
Employing one or more of these tactics might make all the difference in how much you pay for the home you're dealing on.
1. Watch the dates or amount of time the home has been on the market.
Newly listed homes are just starting out and the owners are not usually willing to negotiate price at the start. They may be anticipating buyers clamoring over one another with multiple offers.
If you're looking to get a better deal, it's probably best to steer clear of newly listed homes, unless they have banners shouting: "Must See!" "Vendor Renovated" or "Let's Deal". Instead, tour homes that have been on the market for 60 days or more. These sellers are more likely to consider lower offers.
They may not accept your offer, but it's a great starting point for negotiating a final price for less than they were originally asking!
2. Watch the prices.
Has the asking price been reduced? Has it been reduced more than once? Have more features been added?
Go view these homes and ask questions. Find out if they are motivated sellers. Most homebuyers want to offer less than the asking price. It's human nature. We're all looking for a deal! However, lowball offers may not be received well by home sellers who have just listed their home and feel that their asking price is already more than fair. Less motivated sellers will want to ride the market for a while and sell when someone comes along with an offer that matches their asking price.
View the homes that are advertising price deductions. Talk to the sellers and find out what their motivation for selling is. If they are being transferred for work, or trying to move before school starts again, or just pressed for time there may be a deal to be made!
3. Give a short time to accept your offer.
If you write an offer to purchase, make sure you give the sellers a very short time to accept the offer (24 hours or less). This way, they have little time to reconsider or change their mind. If you give the sellers too much time to accept your offer it also allows more time for other buyers to submit their offers, which could be exactly what the sellers want. Act quickly!
If you're going to make the deal, get the sellers' signatures ASAP! Once the offer is signed, the decision seems more final.
4. Get a home inspection.
Unless you are an expert handyman, you should always get an inspection. However, what if the home inspection comes back with repairs or hidden costs that neither party knew about?
According to contract law, unacceptable repairs are a way for buyers to remove themselves from the sale contract. You may consider this if you don't want to, or simply cannot deal with repairs or renovations right away.
But what if you don't walk away and use this information to renegotiate the contract instead? Perhaps there could be major price reduction, or the seller may provide you with cash back incentive to cover the costs of the repairs. Be sure to negotiate enough funds to cover the full cost of any repair required.
This may mean getting quotes from local businesses! However, unlike car repairs, the lowest quote may not be in your best interest. You don't want just a quick putty job when you have a cracked foundation and rotting floor joists on your hands. A higher repair quote may allow you some flexibility in negotiations.
5. Allowances for Upgrades and Changes.
Many buyers are discouraged when looking at homes that need carpet replacement and/or an extreme makeover in the out-dated bathroom that was hip 30 years ago, but these items need not to frighten you away from buying the home. So what if they current owners have painted the walls fluorescent pink or made a series of other of their "DIY home improvements."
Write your offer in accordance to the changes you require. Ask the seller to give you a renovation or upgrade allowance to cover any cost of changes or upgrades that are needed. Once again, be sure your cost estimate is adequate and realistic enough to cover the charges of a professional doing the work.
6. Reduce or Include Your Closing Costs
In a slow seller's market, some innovative negotiating may be used, such as using the legal fees or closing costs as negotiating tools.
If all other aspects of negotiating are over and you have not yet received any deal whatsoever, try this one: write in your contract that all closing costs are to be covered by the Seller.
More often than not, the reason a person is selling their home is the key to negotiating. If the seller doesn't outright tell you why they are selling, talk to neighbors. They usually have some informative tidbits that may help you out. They may have heard something about a divorce, job loss, death in the family, winning the lottery, inheriting a mansion in Palm Springs - the neighbors always know.
Highly motivated sellers are usually willing to look at all offers, whether they are high or low. Look for the deal.
8. Do your homework.
Find comparable sales available that show prices comparable to the home you are offering to purchase. If you provide other properties that can justify the price you're offering, the seller may take your offer much more seriously. Use the comparables that best suit your needs.
9. Ask for everything.
It's like that saying: "ask for everything and expect nothing." When writing a low offer, ask for everything you can think of. Even stuff you don't really want that bad. This changes the seller's focus off the price and now they have to factor in their dishwasher, curtains, garden shed, washer and dryer, swing set, trampoline, barbeque, gym equipment, snow blower, ATV, or whatever else you may include in your offer.
Now the negotiations begin.
Barter back and forth about what should be included and what should not. Gradually let them compromise to keep the stuff you didn't really want. In the end, if you're a good bargainer, you should have a lower price than originally asked for and possibly all of the appliances as well.
10. Immediate Possession
Ask for immediate possession, even if the seller's feature sheet says 30 or 60 days to possession. If the seller really wants the deal to stay together, they will negotiate in other areas if they cannot change the date. Again, negotiations open up, and they are the key to getting a better deal.