Want to lower the price of your future home? 6 ways to work with a seller

There’s no doubt that 2021 is an interesting time if you're selling your home, and even more so if you're in the market to buy a home. Historically low interest rates make it an attractive time to get a mortgage. But at the same time, the high demand for real estate and limited inventory mean it’s definitely a seller’s market rather than a buyer's market.

Home buyers, especially first-time buyers, may be hesitant in the negotiation process for fear that a seller will pass their offer up for a more attractive one. Luckily, there are a few tactics you can use to work with the seller on a lower price without missing your chance to buy your dream home.

Wondering if you qualify to take advantage of the record-low interest rates and have a more favorable home affordability? Visit Credible to get personalized rates in just a few minutes without affecting your credit score.

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How can I negotiate a better price for a home I’m interested in?

Just because we’re living in a seller’s market right now doesn’t mean you can’t negotiate on your home purchase. Here are a few tips for negotiating with a seller to find a deal that benefits you both:

1. Get your finances in order ahead of time

It’s essential to get your finances in order before you make an offer on a home. And with the housing market moving as quickly as it is, it’s probably best to sort the financing out before you start seriously looking.

One of the easiest ways to do this is to use an online mortgage broker like Credible, where you can shop rates from multiple mortgage lenders by filling out a single form. You can get a preapproval letter to present to home sellers without having to worry about it affecting your credit score.

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2. Be flexible with your timeline

In some cases, sellers are working on a strict timeline and need a buyer who can get on board. Maybe it’s that they’re moving and need to close as quickly as possible. On the other hand, it might be that they want to hold onto the home for a couple more months and need a buyer willing to wait. Either way, being flexible about your timeline will make your offer even more attractive.

3. Make a realistic offer

The current housing market is great for sellers. In many areas, homes are selling significantly above the listed price, making it difficult for buyers to have an offer accepted. With that in mind, be realistic about your offer. Real estate agents can utilize market analysis to help evaluate comparable sales in the area and identify a fair house price. If you lowball the seller, you can expect them to pass in favor of another offer in the bidding war.

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4. Thoroughly inspect the home for any issues

One of the most important steps in the home buying process is the inspection of a home. First, it helps to identify if there are any red flags in the home and anything that might need to be repaired. But it can also be used as a price negotiation tool, as most home contracts are contingent on an inspection.

If there’s anything wrong with the home, even if it’s just something that will need to be repaired in a few years, you can use that to either lower the offer price or ask the seller to fix it before the deal closes.

5. Offer a cash payment

Most people simply can’t afford to buy a home in cash. But if it so happens that your finances allow it and you're willing to pay it, consider making an all-cash offer on the home to close the deal. A cash payment provides a bit of extra security for the seller since there’s less chance of the deal falling through. Plus, the timeline is more flexible since there’s no lender’s schedule to work around.

Don’t feel bad if you can’t make a cash offer on a home — most people can’t. If that’s the case, use an online marketplace like Credible, where you can compare offers from multiple lenders and make sure you’re getting the best deal.

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6. Negotiate other terms

If negotiating the house purchase price isn’t an option or you’re worried it might turn the seller off, try negotiating other factors to save money. You can ask for any number of concessions, such as asking the seller to pay closing costs, inspection fees or other costs associated with the sale of the home before its closing date.

What’s next?

Are you ready to start shopping for a home and in need of buyer resources? Credible’s marketplace is a great place to start when you’re figuring out your budget and what type of mortgage and mortgage rates you might qualify for. Visit Credible to get in touch with experienced loan officers and get your mortgage questions answered.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.