4 Ways for Buyers to Negotiate a Win-Win Offer

The best real estate transactions don’t leave one party feeling burned. They achieve win-wins, and leave both parties satisfied.

As a buyer, there are a variety of ways to negotiate your way to a win-win outcome. Here are four we love.

1) Make an offer with a contingency. Let’s imagine your dream home has been on the market for a few weeks or even months, suggesting it may be slightly overpriced. Let’s further imagine that in addition to buying, you also have a home to sell, and need more time to complete that transaction.

This would be a great situation to offer a contingency. Since you need more time, you might convey to the seller, “I’ll pay your price, but with the contingency that I have 30 days to sell my house first.” You may be paying a premium, but in return, you’re getting your dream property and the time to sell your own home.

2) Buy down your interest rate. Working with your lender, you may be able to pay up front to bring your interest rate down—to “buy down” your interest rate. Let’s say you have a 4.5% rate on a 30-year fixed mortgage, but the lender determines you can bring that down to 3.875% with $17k. That lower rate could save you hundreds of dollars per month.

Why not just make an offer for $17k less on the home, then put that money toward your mortgage? Because some listing agents and sellers may prefer to provide credit than to drop the price. Although it’s money out of their pocket either way, the reduced price won’t show up until the transaction has closed, which means it won’t send reverberations through the market. For the seller and the agent, this discrete approach may be preferable—a classic win-win.

3) Ask for credit. If you’re a first-time homebuyer, you’ve probably scraped everything you can together for the down payment...and then have to pay for closing costs. Or perhaps you have just enough to cover closing costs, but really need another $8k for a new floor.

In this type of situation, you could ask for $8k from the seller in credit. Rather than simply writing you an $8k check or knocking $8k off the price, the seller could put $8k into escrow toward your closing costs. You now get to hold onto that additional $8k you were prepared to pay, and put it toward the floor instead. The seller has sold their house, and you got the new floor—another win-win!

4) Ask for a lower price. We hope by this point you see why we put this last—clearly there are many ways of effectively negotiating down your price without simply asking the seller for a better deal. These differences may seem superficial, but they can make the difference between a smooth, win-win transaction and a knuckle-dragging slog.

There may be times when you simply believe the property is overpriced or that the market will soften. The point is, take the time to understand your seller and what they value, whether it be getting the best price, a swift transaction, or something else. Above all, strive for a win-win, so that everybody walks away happy.

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