Negotiation Tactics Every Buyer Should Use

Buying a home is one of the biggest financial decisions you'll ever make, and for first-time buyers, the process can feel overwhelming. However, negotiation is a crucial step that can help you secure a better price, favorable terms, and additional perks from the seller. Many first-time homebuyers believe they have to accept the seller's terms as they are, but the reality is that almost everything in real estate is negotiable.

We’ll break down the key negotiation strategies every first-time homebuyer should use to get the best deal possible.

1. Get Pre-Approved and Show You’re a Serious Buyer

• A pre-approval letter from a lender shows sellers that your financing is in place.
• Sellers are more likely to negotiate with buyers who have their finances in order.
• Pre-approved buyers may have an advantage over those who are just pre-qualified.

2. Start with a Strong Yet Competitive Offer

• Don’t lowball in a seller’s market. If you bid too low, you risk losing the home to another buyer.
• In a buyer’s market, start below the asking price. This leaves room for negotiations while showing the seller you’re serious.
• Include an earnest money deposit. This signals your commitment and can make your offer stand out.

3. Leverage Contingencies to Protect Yourself

• Inspection Contingency: Allows you to renegotiate if major repairs are needed.
• Financing Contingency: Protects you if your mortgage financing falls through.
• Appraisal Contingency: Ensures you don’t overpay for a home if the appraisal comes in lower than the offer price.
• Home Sale Contingency: Useful if you need to sell your current home before buying a new one.

  4. Ask for Seller Concessions to Reduce Costs

• Closing Cost Assistance: Request the seller to cover part of your closing costs.
• Include Appliances and Fixtures: Negotiate to keep appliances, furniture, or home warranties.
• Repairs and Updates: If a home inspection reveals needed repairs, ask the seller to fix them before closing or provide a credit for future repairs.

5. Use the Home Inspection as a Negotiation Tool

• Negotiate for repairs or price reductions. If the inspection reveals problems, you can request the seller to fix them or lower the price.
• Prioritize major issues. Focus on structural, plumbing, electrical, and roofing concerns rather than cosmetic fixes.
• Consider a repair credit. Instead of asking the seller to fix issues, negotiate a credit to handle repairs yourself after closing.

6. Be Prepared to Walk Away if Necessary

• Having alternatives gives you power.  If negotiations don’t go in your favor, knowing you have other options allows you to confidently step away.
• Don’t settle out of fear. Rushing into a bad deal can cost you more in the long run.
• Stay firm on your non-negotiables. If the home doesn’t meet essential criteria, be willing to walk away.

1. Time Your Offer Strategically

• Homes that have been on the market longer may have more motivated sellers.
• Making an offer at the end of the month could work in your favor if the seller is eager to close.

2. Know When to Be Flexible

• If you’re up against multiple offers, consider offering a faster closing or waiving minor contingencies (but never major protections like inspection and financing contingencies).
• Offer a leaseback option if the seller needs time to move out.