Home Buyers are no different and it seems like the natural way to start the negotiation process is to offer less than the asking price for the home. However, with the market making a turn upward, be wary of "low balling" and submitting an outrageously low amount, many Sellers are now receiving Multiple Offers on their home.
Having the Seller knock a few thousand dollars off the sales price sounds good, but in actuality, it won't make much difference in your monthly payments. However, a buyer who only has enough available funds for down payment and closing costs will have to live in a home exactly the way it is until they've saved more money to make their desired changes/repairs. Instead of lowering your offering price, how about having the Seller take that money off in other areas like the Home's Condition or Seller Concessions, could make a big difference in your pocket book.
Let's say you found a home that needed $5,000 worth of improvements and the seller would lower the price by that amount. Great, your purchase price is lowered BUT financing those improvements with a separate bank loan will result in you having higher payments due to a higher interest rate and shorter term than your mortgage.
- INSTEAD, you could Offer Full Price and ask the seller to make your desired improvements prior to closing. This will result in lower monthly payments based on today's low mortgage rates and 30 year term.
- OR negotiate with the seller to pay that amount of your closing costs, which then means you get to check your saved money & now have the cash to make the improvements.
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