Home Purchase Negotiation
Here are ten important questions you should ask your Sales Associate and why you should ask them.*
1. How long has the property been on the market?
Why: The length of time a property has been on the market may indicate the seller's willingness to negotiate.
2. Have there been any price reductions during the listing period?
Why: The amount of any price reduction, as it relates to the overall purchase price, may indicate the seller's desire to attract an offer.
3. Have there been any other offers on the property?
Why: It will be helpful to know what offers may have been turned down and for what reason.
4. What is the motivation of the seller?
Why: Motivation is a key element in any negotiation. As an example, if the seller has already purchased a new property, your ability to close quickly may be an attractive element of the negotiations.
5. What personal items are included in the sale?
Why: Anything the seller is willing to leave behind that you won't need to buy when you move in has real value. Consider those items in your offer.
6. What is the price range of Sold properties in the area?
Why: This information is important since it will indicate the top and bottom of that specific market.
7. What is the average time on market for properties in this area?
Why: Short market times may indicate a sellers' market. If this is the case, you may face competition from other buyers.
8. What is the list to sale price ratio in this area?
Why: This information will indicate a sellers' past willingness to negotiate and by how much.
9. What is the average sales price per square foot of recent solds?
Why: This approach to establish value works best in a P.U.D. and/or where there are similar homes, lot sizes and improvements.
10. What other known factors about the property or neighborhood could affect value?
Why: Review the Seller's Disclosure Statement very carefully with your Sales Associate.
If you will be financing the property, get preapproved for a mortgage prior to making your offer. This will show the seller your commitment and ability to perform. Preapproval can be extremely important in a sellers' market.
*Depending on the type of agency relationship you have with your Sales Associate, he or she may not be able to assist you with these specific questions.