uying a house is a big financial commitment, so you want to ensure that you receive the best deal possible through negotiation.

Negotiating for real estate is crucial to getting the best deal possible. The key to successful negotiation is knowledge and tactics.

Thus, it would be best if you were prepared beforehand and arm yourself with the knowledge and tips before negotiating with the seller.

Here are ten tips on how to negotiate a home purchase:

Assess The Housing Market Conditions

Knowledge is the key to a successful negotiation. You need to know the actual worth of the property and the housing market conditions to understand what you can expect.

Usually, there are two housing market conditions: Buyer's and seller's markets. It would be best to determine whether the home you want to buy is in a buyer's or seller's market before you make an offer.

Hitting the Mark

When there are more properties for sale than buyers, sellers are more willing to compromise. A buyers market gives you an advantage in negotiations and allows you to start with a lower offer.

In the latter case, sellers have greater negotiating power since there are more prospective buyers than available properties.

Thus, your negotiation power depends on which market the house is in, so it's better to assess the housing market condition before making the offer.

Insist On An Inspection And Valuation

The valuation of the property determines the ultimate selling price of a house. The valuer will inspect the condition of the house and land prices around the area to determine the property's market value. This will help you know the worth of the property and the maximum value you can go to purchase the house.

Weighing the options cartoon

Apart from the worth, the property's inspection would help you inspect the house's condition to see if there are any issues in the place. If any problems are found, you may request concessions from the seller.

In some instances, you may ask the seller to repair the problem, give you credit for closing fees, or decrease the price. If you find a significant defect in the house, you can also back out from the deal.

With inspection and valuation, you will get a much clearer picture of the house and the issues you'll face if you purchase. It will also help you negotiate the home purchase as you know how much the place is worth.

Consider Contingencies

You should always look for the contingencies while purchasing the house. Thus, make sure to research the area and read the fine print of any offers from the sellers.

Most buyers also negotiate an appraisal contingency to protect themselves from unforeseen circumstances in the future.

For instance, you just signed the contract and bought the house for $500,000. Later, you discover that a factory is set to be built near the residential area that would drop the house price to $300 K. Now, you are stuck paying a higher price than it's worth.

Always Communicate Through The Agent.

Working with the agent while purchasing the house is beneficial, especially if you are a first home buyer. Real estate agents are the experts when it comes to house purchases.

The agents know the real estate terms, which we might not be familiar with. This includes legally sensitive concepts and basic terminologies which we may misinterpret.

For instance, buyers may think inspection and appraisal are the same things that are different from one another.

Having an expert while communicating with the seller is beneficial for you while negotiating the home purchase; they know the market condition and housing pricing and have the bargaining power to help you negotiate the best deal.

Thus, it is wise to always communicate through the agent than directly communicate with the seller.

Inquire About Closing Costs.

Closing costs are the costs that you have to pay at the settlement. This includes property taxes, insurance, appraisal fees, inspection prices, and credit check fees. In most cases, closing expenses range from 3% to 6% of the entire loan amount.

You should anticipate spending between $4,500 and $9,000 in closing fees if you close on a $150,000 loan. Because of this, these costs might be a substantial roadblock on your path to purchasing a property.

If you want to purchase a house but can't afford the closing fees, you might ask the seller to help out. The seller may agree to expedite the deal.

However, if you have a lot of competition for your house, you may want to avoid asking for closing expenses. You can first inquire with your lender about the possibility of including closing costs into your loan.

Learn Why The Seller Is Moving.

The more information you have about a seller, the more prepared you will be to bargain with them.

If your seller is selling a house urgently, you have more negotiating power since the seller wants to move out as soon as possible and thus, does not have time to negotiate with other buyers.

For instance, if your seller just divorced or is looking to move to a better place for their children's education, they would be more ready to sell quickly as possible, and you have the negotiating power. It will be a bonus point for you if the house has been on the market for a while.

Home profit rising

Get Personal

Selling a home is not just a sale of the property. It has a more emotional attachment to it. Thus, the seller would want to sell the house to people who would take proper care of their home.

Thus, you can be proactive while purchasing the house and add more emotions. You can send a letter to why you want to buy the house and why you like it. Also, add on how you plan to use it.

For instance, sometimes, the seller may have to move out of the house and leave their pets due to restrictions. On the same note, if you offer to take care of their pet, it can add emotional value to them.

Thus, even if you can't offer extra money, emotional touch can help your offer stand out from the crowd.

Get Your Loan Pre Approved.

It is advisable to get a pre-approval loan before looking for the house, as it proves to the seller that you are serious about buying and can afford their home.

It will also set the price to your budget, and there is a high chance of negotiating the price which fits the budget.

You will also have an advantage over other bidders when sellers pick between competing offers. They will not consider bids from purchasers whose finances are in doubt.

Negotiate Within A Reason

The negotiation is possible when both seller and buyer find the price reasonable for them. Thus, you shouldn't make lowball bids that the seller thinks you're just wasting their time.

In the same way, don't make an offer that you can't afford to accept. A good rule of thumb is to come in 10% under the asking price.

If you're in a buyer's market, you may be able to start lower; if you're in a seller's market, you may have to start higher.

Don't Hesitate To Walk Away.

If you come across a seller unwilling to negotiate the price, it's better to walk away. Usually, when you're in a position to win a bidding battle, it's easy to forget about your budget and offer more than you can afford. If your down payment is too little, you may be forced to take on a larger loan and possibly purchase private mortgage insurance (PMI) before closing.

Thus, it's better to walk away if the house price is not on your budget. You can tell the real estate agent to look for similar property at a reasonable price.

Sometimes, walking away from the deal can help you get the deal at an affordable price since the seller would feel you would walk away. Use this strategy as a last resort while negotiating for the house price.


Negotiating a house price may be intimidating, especially if you are a first home buyer. Thus, it is advisable to work with a real estate agent who can help you out during this process and provide you with the best deal possible.

Before negotiating, make sure to understand the house prices and market conditions and always inspect the house to gain a better idea about the house's prices and worth.

Similarly, if you cannot come to a negotiation, it's better to walk away and look for other houses. Never purchase a home out of your budget, as it may get you into financial trouble later.


Apr 13, 2022
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