How To Negotiate a Good Deal on a House

Tips and Strategies to Help You Navigate the Negotiation of a Real Estate Contract

Sealing the deal

Some people imagine that getting a "good deal" on a house involves stumbling onto an unsuspecting and desperate seller who is willing to give the house to the first willing taker. Dream on.

Home sales are normally negotiated between two informed parties who are going to act in their own best interests. In balanced markets, the seller will have other interested buyers to choose from.  

Here are some strategies to help you negotiate a good deal on a house in the real world.

1. Keep a united front. Often there are several people involved on the buyer side of the negotiation - husband, wife, real estate agent, friend, parents, etc. It is very important that all present a united front in the image that is presented to the seller. This posture may not be the real situation. The husband may love the house, but the wife thinks there is too much work to be done. If the sellers see a break in the ranks, they know that they have an advantage that can be exploited. I have heard real estate agents actually give away this crucial bit of information, telling us that the husband really loves the house, and they are "working on the wife."

2. Look beyond face value. A cynical belief that everyone is lying will not be productive. However, a healthy skepticism is a good thing in negotiation. Not everything stated is going to hold true. Statements like, "Price firm," or "2% bonus for contract this week" should not be taken as fact. How many times has a new homes salesman said something about "making a quota" or "getting the contract in this quarter?"

These proposals can give you an idea of what the other side cares about, but should not be taken for gospel. Don't' be afraid to look behind the curtain to see where the bottom line really is. I can think of many instances when I did not think an offer would fly, and yet, we were able to work out an agreement.

3. Leave ego at the door. There is nothing more destructive to a negotiation than getting ego involved. For example, sometimes buyers include a note with their offer letting the seller know that their house is not worth what they are asking, and pointing out faults. This establishes a premium in the seller's mind that the buyer is going to have to pay. He is going to have to pay for the privilege of insulting the house.

Needless to say, this is an unnecessary burden to have to overcome. Always compliment the sellers' house, gardens, decorating, and, of course, their beautiful children and pets. Use market data to set price. Be willing to give up some requests, while you hold on to the ones that are most important to you. Never try to win every point.

4. Don't reveal weaknesses. You may have some constraints that should be kept quiet. Some examples: You may be about to close on your home, and need to move quickly into the seller's house. You may need to start kids in school. You may have had a difficult time finding a house close to work. You may be in the middle of a divorce. You may have an interest lock about to expire.

None of this information is going to get you a better deal. They all signal weakness in your negotiating position. Position yourself as a fully qualified buyer who appreciate the seller's home, and have placed it at the top of your list. Present yourself as the kind of buyer that the seller can trust. There is some distance between contract to closing -- and you are the one who will go the distance.

5. Understand the tone. I have seen potentially good negotiations go off track because of a misperception of the tone that is necessary. Some examples:

You could tell from their bird feeders and books that the sellers were environmentalists. They were delighted that the buyer was a geologist who would feed the birds, and would leave the little dog tombstone in place. The tone of this negotiation was straightforward and intellectually honest.

In another case, the sellers were in their 90s, did not have a computer, and did not do well on the phone. All negotiations needed to be in person. Fortunately, the buyers understood this, and took the time to slow down and visit when they were at the house.

In another case, we found repeated cases of wrong information conveyed by the agent for the seller. It appeared that the agent did not handle details well, and tended to shoot from the hip. We had to set a firm tone, take care of paperwork, and watch deadlines. Had we relied on his fuzzy information, we could have been in trouble.

6. Don't take trust for granted. Trust is the single most important factor in getting what you want from a negotiation. People do not begin by completely trusting one another, especially when money is involved. They assume that the other party will have interests in conflict with theirs.

It is crucial to establish rapport as quickly as possible with the agent and the sellers, and let them know that you will be reasonable and responsible people to deal with. Do this by finding some common ground with them. Look for common interests, similar jobs, or similar children's needs. Respond in a timely manner to their counteroffers. Show that you are qualified to buy the property. If you work for a well-known company, this may increase the seller's trust. Begin by establishing trust, and then reinforce it throughout the process.

A buyer expressed to me that he regretted saying to the seller that he liked the house. He felt that he should have been more aloof. Later we were in a multiple offer situation. His offer was chosen. I think his appreciation for the house won the day. Also, he had gained "real person" status, while the other offers were just paper. The seller trusted him to close the deal.

7. Have enough information. Having information about the property, the local market, and the seller will give you confidence in your offer and strategy. Here are some important pieces of information:

  • What are the comparable sales in the neighborhood?
  • How is the market in general?
  • How long has this house been on the market?
  • Have there been price changes already?
  • Why is the seller selling?
  • How fast do they want to move?
  • Is there a time deadline?
  • How much was paid for the house on the last sale?
  • What does the appraisal district show for the value?
  • What are the HOA dues and taxes?
  • Is there a property inspection available?
  • Is there a seller's disclosure available for review?
  • Is the survey available?
  • Are there any offers coming in at the same time as yours?

With good information on comparable sales, you can anchor your price to the marketplace, while showing a desire to be reasonable. Price is never the only consideration in the negotiation for a house. There are many others: Getting settled, starting kids in school, completing a relocation, being able to focus on work, moving out of the rental cycle, starting over, having no issues after closing, etc.

Negotiating a good deal on a house requires skill in showing the seller that your offer is reasonable, while at the same time, building a relationship of trust, keeping a healthy skepticism, and presenting the image of a strong buyer. Good luck on your next negotiation for a house!


Share this article!

Follow us!

Find more helpful articles:



I am glad you highlighted things that real estate buyers often miss, i.e. trust...rapport...I am glad for the tips.

By Mary Norton