Home Buying Negotiations

The art of negotiation for buying a home is exactly that, an art. It takes a keen understanding of the process in order to be good at it--and before you begin making offers on homes.

When it comes to Real Estate matters, the 3 most important aspects of an effective negotiation are:

Once you have found a home that you are prepared to buy, the first step in your process of negotiation is to determine a fair value of the home. Your San Diego Real Estate Agent can be of great help. Real Estate Agents have access to the information that you need with a Comparable Market Analyses (CMAs). A CMA will show exactly what properties similar to the one in which you have an interest have sold for. These analyses are based on fact, rather than opinion, and that information will always be of more value to you. The CMA which you obtain will most likely give you some general information about the houses that will be compared: Number of bedrooms and baths, square footage, the listing price and the sold price. It is important that the CMA focuses on houses similar to the one you have selected. If you are interested in a 4 bedroom, 2 1/2 bath 2 story, a CMA that lists only 3 bedroom 1 bath homes is of little or no value. Likewise, a CMA that includes a number of properties from a neighborhood 2 miles away will have limited value. To have a good CMA you must have all of the similar sales in the neighborhood in the last year. Obviously, the fresher the data (the more houses sold in the last few months), the better the CMA.

Just having the right information is not enough. You must prepare yourself in order to use it effectively. The most important factor in your preparation is your emotional frame of mind. Buying a house is emotionally charged enough, without adding to everything by letting your emotions override your common sense. It is not unusual to be excited--in fact, it is normal--but you must keep your excitement in check or you will lose the value of all the information you have gathered.

In addition to your emotional frame of mind, your financial frame of mind should be in order. An offer to purchase will carry a lot more weight if there are no dangling financial problems and if you have been pre-qualified for a mortgage.

Finally, plan your work and work your plan. Organize your information and have it quickly available. When it comes time to make an offer, you don't want your "ammunition" scattered on scraps of paper in the back seat of your car. Again, familiarize yourself with offers and contracts, since this is how you will be negotiating.