Truth or Dare? I Know How to Win at Price Negotiations

Do you think that buying a house is a bit easier than others make it seem? Perhaps you're right. After all, many homeowners put their homes For Sale By Owner and likely just as many buyers that choose to forego traditional real estate advice and attempt to purchase the home using only an escrow agency. Many buyers believe that they have the wit and luck to negotiate the sale themselves — even without any prior experience in selling or buying a house. Are these investors coming out on top when buying a home, or are they missing out on the knowledge and experience of a qualified real estate agent who can potentially save them thousands?

For anyone who has watched potential buyers negotiate a home sale on television or in the movies, spoiler alert, it isn't that simple. While some aspects of a real estate transaction are pretty cut and dry, we caution buyers to attempt price negotiations alone. Money is subject to buyers, and sellers often take it personally. A buyer may be offended by what they perceive as an unreasonable asking price while a seller may be insulted when receiving a lowball offer.

What many buyers fail to realize is that the price negotiations when buying a home involve much more than the listing price. The "price" of a home is all of the expenditures involved on the buyer's side, financial and otherwise. A seller may agree to pay the price of the closing costs, but the buyer may need to pay the "price" of renovations or furnishings that require an investment after the home purchase is finalized.

Why Investing in a Real Estate Agent Saves Money When Buying a Home

While some buyers may balk at the thought of paying a broker to perform a service that they believe they can do themselves, these individuals typically don't understand how much an experienced and knowledgeable agent can save them in the end. Real estate agents are expert negotiators who know not only how to approach this conversation, but also know which aspects of the sale can and should be negotiated for the buyer.

For example, a buyer may be able to talk a seller down a few thousand dollars on their own, only to realize that they need to replace their roof within a year of the home sale. In contrast, a real estate agent can order a roofing inspection from a certified roofing company and negotiate a replacement roof installation before the sale. The investment of a few thousand dollars ends up saving the buyer upwards of tens-of-thousands of dollars on the roofing and potential damage expenses.

Can a buyer negotiate buying a home on their own? Absolutely. Some even come out on top in the end. However, this is not a wise decision for most buyers, especially those who are entering into their first real estate transaction. By hiring an experienced real estate agent, buyers have the potential to save more than they ever could have entering into negotiations alone.

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