When you are buying a home, deciding what to offer can be nerve-wracking, especially if it's your first real estate transaction. You don't want to make an insulting offer or get outbid, but you also want to avoid paying more than necessary. Negotiations begin as soon as the seller receives an offer and nearly everything is negotiable, which means there can be a lot of back and forth before an offer is accepted. Here are some negotiation tips to help you walk away from the home-buying process satisfied with what you're paying.


In a hot market, make your best offer

If you're in a hot real estate market, don't forget about your competition. When it's a seller's market, there's a good chance there will be at least two other offers on the table. Make a lowball offer and you're wasting your time. If you want the house, be prepared with your best offer right away. You'll have the greatest chance of success if you offer the asking price, show mortgage preapproval, put down at least 20% as a down payment, and reduce the contract contingencies as much as possible.


Check how long the house has been on the market

The longer the home has been listed for sale, the more power you have in negotiations. No seller enjoys having strangers coming through their home all the time and the stress of keeping their home in showroom condition. If the home has been listed for at least 30 days, it's already been market-tested and you should be comfortable offering less than the asking price.


Try a zero-repair allowance clause

A clause that allows you to request repairs can turn off sellers who know there are problems with the home. If you want a stronger offer, you can consider a zero-repair allowance clause. With this clause, you are agreeing to buy the home as-is. Assuming you live in a state that allows you to back out of the deal if a home inspection turns up major problems, and these problems are found, you can tell the seller you are backing out of the deal because you agreed to not request any repairs. In most cases, the seller will negotiate repairs anyway rather than losing the sale.


Make a second counter offer

If the seller counters your initial offer, you don't have to accept or reject it; you can counter again. Many buyers hate negotiations enough that they will accept a seller's counter offer, even if they think they could pay less. You have nothing to lose by making a second counter offer but everything to gain.


Consider all concessions

Don't focus too much on the purchase price, which is an easy focal point for buyers and sellers alike. Sellers want to know they're getting as much as possible for their home, but this doesn't mean you can't save money in other ways. If a seller won't budge from their asking price, ask for a mortgage buydown, closing cost credits, or repair credits instead.


Request a credit toward closing costs

Many sellers are more willing to give you a credit toward closing costs than reduce their price -- even if the dollar amount is the same. Because closing costs are out-of-pocket costs of buying a home, unlike a mortgage, it may make more sense to make a full offer -- or close to full price -- and request a credit toward closing costs instead. Depending on your mortgage lender and program, you may be able to request up to 3% of your closing costs. You can request either a percentage of your closing costs or a flat dollar amount toward closing.


Try offering a leaseback

Sometimes sellers are extra motivated to sell because they have already bought a new home, moved out of the area, or need a larger place. Sometimes the opposite is true and the sellers aren't quite ready to move out. If you know that the seller doesn't have a new home yet or otherwise needs more time, you can make your offer more attractive by offering a zero-cost rent-back for 30 to 90 days.

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