If you are buying a home today:
- You still have the upper hand in making a great deal but you won’t find the huge discounts from listing prices any more, mostly because sellers have dropped their prices already and there is a good deal of buyer competition for flipping properties or purchasing investment rentals. Making an offer 10% below list is still reasonable, but don’t expect a sure deal. The average homebuyer today is only saving about 3% from the listing price. So look for the seller to perhaps pay your closing costs instead, which can easily save you about $5000.
- List your own home before you start shopping for a new one because it takes about 90 days to sell property today. Sellers will not be happy accepting purchase offers with “sale of my own home” contingencies in them, so you will have more leverage during negotiations since the deal is less likely to fall apart. Getting pre-qualified for a new mortgage is a must-have as well, in order for your purchase offer to be seriously considered.
- Don’t fall in love! Be prepared to walk away if the seller will not make reasonable concessions, as your ability to abandon these negotiations is your best bargaining tool. Given the plentiful supply of very similar and comparable homes on the market, you should not have too much difficulty swapping one house for another in your search.
If you are selling your home today:
- Don’t be offended by lowball offers and be sure to keep your cool so you don’t blow any chance at negotiating. The buyer is most likely just testing you to see how large a discount they can get from the asking price. Thank the potential buyer for their interest and ask that they come back with earnest offers (money accompanying the purchase offer). Show the bidder comparable homes and recent sales data to support your listing price.
- Be honest about the property by having your house inspected before putting it up for sale. In Arizona, you need to make a Sellers Property Disclosure Statement (SPDS) so make any necessary repairs yourself to limit the amount of issues potential buyers will point out to negotiate on.
- Be ready to move fast and make sure you tell potential buyers, especially those with children of school age. It will help your home stand out from the short sales and foreclosures in your neighborhood, which may hove lower list prices but much longer closing periods (up to 6 months). Buyers with a time limit will be more willing to pay up for a house that they can move in to quickly.
