When buying a new home, you’re likely to receive advice from your agent on sales trends in your target neighborhoods and how a deal might be negotiated with a particular buyer.
Check out these examples of common advice, so you can decide how you might respond.
Creating tension
Many agents leverage neighborhood listings when negotiating with the seller to create tension in the deal. They might say, “we can always purchase a similar property on the next street”. An agent will also use competitive listings to justify an offer. Both strategies are perfectly legitimate.
Data influence
Your agent should have access to the latest sales data for your target neighborhoods and style of property. They’ll use this to justify an offer if you’re buying, especially if it’s a low bid. Of course, a seller’s agent can reject and reset a buyer’s expectations using the same data.
Your rights
When the market was peaking, folks did some crazy stuff to win the deal. Sanity, however, has returned. Don’t waive any of your rights when negotiating. Make any deal contingent on factors such as the property inspection results and final loan approval. Not doing so can get you into deep trouble if things go wrong.
Press pause
You wouldn’t have heard this too much in the past two years when the market was super-hot. Now, your agent may suggest this. Don’t feel rushed, and don’t put in offers for homes you don’t love. If you’re unsure, press pause.
Paying costs
When buying a new apartment, an agent may suggest you ask the developer to cover the closing costs. There’s no harm in using this as a negotiation tactic. Its success will depend on the popularity of the development. Since mortgage interest rates started to rise, developers have been more willing to strike a deal. So, give it a go.