Let's say you've fallen in love with a home. It's just the right size and it's in a lovely community. It's just your type, too: you can envision yourself living and thriving within its rooms. You've practically picked out the color scheme for the kitchen. The only problem is, the seller's asking price is above your budget. How can you negotiate for a price you can afford?
Here are a few tips that can help you out, starting with using research and facts toward your cause:
1. Refer to the CMA.
CMA stands for "comparative market analysis." Your broker is in charge of researching, compiling, and providing you with this report. The CMA details recently sold properties within the neighborhood that are similar to the home you want. With the CMA, you can check how much the other homes have sold for, and then compare the figures to your seller's asking price. The prices should be more or less the same. If the properties on the CMA sold for less, your broker may be able to use the information to convince the seller to lower his price on the property.
2. Get the property inspected.
Whether you're haggling for a lower price or not, it's always in your best interest to have a certified inspector conduct a thorough assessment of the property. It's a way to determine whether you're getting value for your money, and whether the property is safe and in good condition. Should the inspector report certain needed repairs or less-than-stellar elements in the home, use this information to try to re-negotiate for a lower price, one more appropriate given the amount of work you'll have to put into the repairs. Take note, however, that sometimes fixer-uppers can cost you more money rather than save you some.
Next, learn how you can make your offer appealing with more tips in Part 2.