Buying a home isn’t like other financial transactions we make. First, it’s far more expensive than anything else we buy. And second, there’s room for negotiation. Beyond asking for a military discount, you can’t walk into a store and offer $5 for a t-shirt when the tag clearly says $15.
But buying a home is different. In fact, nearly everything is up for negotiation. And when it comes to such a large financial investment, it’s important that you get the most for your money.
9 Things to Negotiate on a Home Sale Contract
1. The Price
The most common type of negotiation is the price of the home. You may already know the routine: you find a house you want and put in an offer. The homeowner then counters the offer, and you have a few days to accept or deny. This is home sale negotiation at its finest.
Before the sale, there will be a home inspection. If the inspection reveals that the house needs some work done, then you can try to negotiate with the homeowners to cover some of the expenses. There are a couple of ways to do this:
- Ask the homeowner to fix the necessary repairs.
- Ask for credit. Since sellers are usually anxious to get moving, instead of asking for them to handle the repairs, ask that they provide a cash-back credit at escrow so you can then use the money to complete the repair yourself.
Not all appliances will be included in the home sale. If you don’t have a refrigerator, and the house has the perfect stainless steel fridge you were planning to buy anyway, you might consider making an offer on it, along with any other appliances you’d like to see stay.
4. Closing Costs
Closing costs are typically anywhere from 2 to 5 percent of the home sale price, which translates to thousands of dollars. Coming up with a down payment plus closing costs can really strain your budget. A great way to earn some negotiating power on closing costs is to be ready to close quickly. Showing that you’re a serious buyer can settle an anxious homeowner and encourage them to work with you.
If there’s furniture in the home that you love and want to keep in the house, you can make an offer to see if the homeowner is willing to sell it or include in the cost of the home sale.
A contingency means that an offer has been made and accepted, but the final sale is contingent that certain criteria be met. There are many different types of contingencies. The most common contingencies are the appraisal, home inspection, and mortgage approval. These also give you the chance to negotiate the necessary repairs that surfaced through the inspections.
7. Length of Closing Time
Military homebuyers and sellers often work with shortened timelines. Either they’re anxious to get moving and headed to their next duty station or they’re moving to the area and eager to get settled. Regardless of which end of the equation you’re on, it could be in your best interest to negotiate a shorter time to close. Why spend 45 to 60 days preparing to close when both parties need it done in 30?
8. Home Warranty
Usually set for a year, a home warranty is offered to provide protection and reimbursement for appliances that stop working after the sale. Appliances and major home systems like the water heater, HVAC system, and plumbing are often things you want to be covered under a warranty.
A leaseback is the leasing of property back to the vendor. For instance, let’s say the homeowner is military. They received orders to PCS, and the property sold quicker than they expected. They have a month left after closing before they make the move and would like to delay the buyers from moving in and stay on the property for that month leading up to the PCS.
The seller could try to negotiate terms in which they pay rent to you for the extra month after closing or potentially stay there for free.
Getting the most for your money doesn’t mean negotiating everything. As you’re preparing to make an offer on a home, be sure to prioritize your negotiations.
If a break on closing costs is your biggest concern, then be willing to make the necessary repairs out of pocket. Don’t enter the transaction looking to get the best deal, or the sellers may walk the other way. Work with the homeowners on what’s most important to you and let the other stuff go.
Already found the perfect home on MilitaryByOwner, and now you’re ready to get started? Take a look at AAFMAA’s home financing options, then get connected with a professional who will match you with the option that’s best for you and your family.