Top 10 Negotiable Items in Real Estate Transactions
Failing to ask for what we need, want and deserve is something a lot of us women have a habit of doing.
In any real estate negotiation, buyers ask and sellers push back — because if you’re the buyer and you don’t ask, you don’t get. By not asking it can lead to all kinds of unhappiness, you may miss out on amazing opportunities. And you will certainly miss out on a lot of money.
While sellers want the highest price and buyers want the best deal, the two have to meet somewhere in the middle for the deal to close. Negotiating is important!
Not asking for what you want and need is holding you back from reaching your full potential and your happiest self. At the end of the day, everybody has a goal to close a transaction.
For those new to the real estate dance: The negotiations start once the seller receives a written offer. Since EVERYTHING is negotiable, agents for the buyer and seller go back and forth in writing, whether that communication is via email or signed forms. The objective is agreement on the deal’s terms, which include price, time lines, contingencies and items that may come with the property.
Plenty of research shows that – generally speaking – we struggle to know when and what we can negotiate.
Here are 10 easily negotiable items (go for it!):
1) Price (the obvious one)
Buyers and sellers try to negotiate the best price possible for them. The seller wants the highest price and the buyer wants the least amount to pay — usually, it ends up somewhere in the middle. Buyers don’t want to overpay or price themselves out of a resale in the future, while sellers want to make sure the deal makes sense for their financial plan.
2) Closing date
Sellers can negotiate for speed when they need to get their capital out of the home fast; and closing dates will affect buyers’ monthly cash flow once they own the home.
3) Financing contingencies
Buyers competing with all cash offers need to figure out if they can drop the financing contingency, which will shorten their closing time line. Buyers can do this by having their mortgage (or hard money) fully approved prior to making an offer. That preapproval shows that their finances are in order and they can afford the property.
The process of moving into a new home can be highly stressful and labor intensive. If a seller needs a little extra time to get into their new home buyers can offer a zero-cost or low rent-back for 30 to 90 days to entice the seller to accept the offer over others.
5) Home repairs
When a home is out-of-date with appliances that don’t work, popcorn ceilings or cracked pool foundations, for example, a buyer can ask for a lower price because of the cost to bring the home back to today’s standards. Sellers can also specify that their house is being sold “as is” and that they won’t make any repairs.
6) Appraisal contingency
If the buyer’s getting a mortgage, the seller could push for the buyer to waive the appraisal contingency. But then they have to make good on the amount of cash to close, if for some reason the appraisal falls short and the bank will lend them only so much money based on an appraised value.
7) Home warranty
A buyer can ask for a home warranty, or a seller can offer one. This protection plan covers the home’s appliances and systems, like the air-conditioning and hot water heater, in the event these things break or need repair.
8) Closing costs
Buyers have to pay prepaid closing costs for their mortgage, which is money that the mortgage lender holds in escrow, for items like taxes and insurance. A buyer can ask a seller to pay a flat dollar amount toward their closing costs, or up to a percentage for what’s an allowable contribution for a lender.
Personal property, like patio furniture, chandeliers, window treatments and cabinets, is also up for grabs. Whatever’s excluded needs to be stated when the contract is finalized. The stove, dishwasher, microwave and any built-in appliances may come with the property, but not the washer, dryer and refrigerator. In different markets this varies greatly.
While waiving an inspection often comes with “buyer’s remorse,” buyers can try to shorten the time frame for an inspection, from 10 days to five.
So asking for what we need, want and deserve doesn’t come naturally to most of us, and it’s tricky. But fortunately there is good news: it’s not that difficult to learn. There are effective tools and techniques to negotiate powerfully. And practice, practice, practice! With practice we can overcome our fears and learn to confidently and effectively ASK!