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Hi everyone and welcome to another edition to Homebuyer's School, today I'm
joined by Eddie D'ambrosio, a real estate agent with Remax Elite and today the
question we're gonna answer is what's the best way to negotiate a purchase
price of a home? So Eddie this is a big question a lot of people want to know is
how do I negotiate down that purchase price?
Yeah that's a great question.
I think a lot of—every buyer wants the best deal right so everyone's trying to
get the best deal they can and strategy is the key here, so when I talk to
my clients about this kind of the first step in this process of getting the best
deal is understanding—understanding fair market value or current market value of
the property that you're looking at from that point once you understand what
similar properties are selling for then you can formulate a good strategy to go
about getting your home for the low end of that spectrum.
And where do you go about doing this market research?
The first step nowadays with access to
online information is get online, do a bit of research and then take a look at
similar homes to what you're looking at online and see what they're listed for,
what they're selling for if you can, but really—really you're gonna get more
information from your realtor. Your realtor has access to information
and tools that will help you to understand what properties are similar
properties are selling for around you.
Is it also a matter of going out to
different homes and viewing those homes that are similar to the ones that
you're looking for whether new or resale?
Yeah I think anytime you can look at
more properties up to a certain point where I mean I guess you can look at too
much so try to look at a few homes that are kind of similar to—to maybe that one
that you're really interested in and then from there you can maybe more
easily make comparisons.
So once you're finished let's
say you know, you have your price range right, so what's the next step in
terms of what do you need to prepare for before you start actually doing that
negotiation with the seller or salesperson or so on?
Well I think
whenever you're out looking for a home, one of the first steps I always speak
with clients about is go in to speak with your bank or mortgage broker, get a
pre-approval just so that you understand that kind of the price range that you
should be looking in—so that may be as a as a first step is a good place
to start and then—
How do you like—so maybe this goes into the really
technical aspect, but like when you're actually face to face with the seller or
a salesperson, what are some tricks that you would do in terms of negotiating
that price? Just like presenting a price, be like, "well I don't like that price so
I'm gonna go with this much" —right?
Yeah so I mean that's the best way you—
you can do it if you can just you know, okay, put it put in a low price and
hope for the best but that's where it went earlier when I was talking about
you know understanding what is a good price, what should this property be
listed for and determine is it priced really competitively, is it overpriced?—
and then from there determine you know, where your offer should come in at
and then when every— because whenever you can make an offer based on factual
information on data, on previous sales, there's so much more power, you
have a lot more support to that offer so rather than just throwing out a number
for the sake of it because of course everyone wants to get a deal.
But if you find let's say a house that you know you've done your research but it's
beyond that price but you really want that house, is there is there a certain
point where you're like, I can't bid on this because it's way too over valued?
You know, I think it's always worth a shot if you're— if you're especially— especially
maybe in more of a buyers market you may have a little bit more room with
the seller to to go for those properties that are just a step out of your price
range, you may want to consider you know, you
may want to consider looking at properties that potentially need a
little bit more work as typically there's more points on
properties like that to negotiate off of.
Yeah. Do you have any other— anything
else to add in terms of how to negotiate a purchase price at all?
So I think another
really key thing here is when you are looking at properties to be really
diligent with your observations and each property because it's through
those tours of the home where you'll really be able to to take down a
list of of those items that are gonna factor into the purchase price of
the home so that might be the condition of the property, the amount of work still
needed in the home, how current or dated is that property because— and
because these are the things that are really going to help you to
negotiate that purchase price especially if you notice that you know, there's a
new furnace needed and a new roof is needed on that property, pretty soon
bringing up items like this to the sellers attention you know, they can be
great tools to negotiate.
Awesome well thank you very much Eddie. Thank you very
much everyone for joining us and we'll catch you next time.
That's another edition of
Homebuyer's School. Tune in next time
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