Once you’ve been approved for a mortgage, shopped around for the right property and decided on the house you want, making an offer is a nerve-wracking — but exciting — time. With a little luck, you’ll soon find yourself in the midst of negotiations that will make you the owner of the house you’ve had your eye on.
But it’s not just the price you can negotiate — buyers and sellers can negotiate plenty of other details about the transaction to sweeten the deal.
In the last few years, many markets in the U.S. have seen drastically low numbers of houses available for sale compared to the number of buyers shopping for a home. With bidding wars a common occurrence, buyers have been getting more creative to make their offer tempting enough to get the seller’s attention. This includes offering to take on additional costs associated with the deal, forgo the home inspection and let the seller move at his or her own pace.
[Read: What to Expect From the Housing Market in 2018.]
Concessions can make an offer more appealing for the seller and give the buyer a leg up on the competition, but they can also be a useful tool for giving the buyer a break. Ian Katz, principal real estate broker for the Ian K. Katz Group, based in New York City and Westchester, New York, says concessions in negotiations heavily favored the seller in all price points in the New York area in the past few years, particularly 2014 to 2016. Since then, as more newly developed luxury properties have been completed and put on the market, buyers have also been able to take advantage of negotiations with concessions that favor them as well. But Katz says the benefits vary by the home and the level of buyer interest in it. “Now I would say it’s totally property-dependent,” he explains.
While high-price properties may be seeing more market balance, midlevel housing remains tight. At the end of last year, real estate information company Zillow predicted inventory shortages will drive the housing market in 2018, making it particularly difficult for first-time homebuyers to get into the game.
Whether you’re looking to buy a luxury property and want to assess your options or you need an advantage over competing buyers in a tough market, consider these additional things you can negotiate to make the deal less about price and more about the whole package.
Closing costs. One of the more common concessions included in a real estate deal, closing costs are made up of the one-time fees and first or final payments either side needs to make. On the buyer’s side, closing costs may include loan origination fees, recording fees, lender title insurance and inspection and appraisal fees, among other one-time costs. For the seller, transfer taxes, owner title insurance, home warranty premiums and other fees may be required.
All those fees add up. A homebuyer typically pays between 2 and 5 percent of the purchase price in closing costs — separate from the actual home purchase — according to Zillow. An easy way to ease the financial burden for either side is to include those costs in your offer.
Transaction-related taxes. Often counted as part of closing costs on the seller side, many states, cities or even building cooperative boards will have required transfer taxes and fees, which must be paid when a property changes hands. If you’re a buyer looking to make your offer more attractive but can’t cover all closing costs, offering to take over a transfer tax for your seller could be a great compromise.
“Offer to cover half of it, some of it, all of it just to kind of make the net proceeds for sellers look as good as possible,” Katz says.
[See: 8 Potential Headaches to Be Aware of Before Becoming a Homeowner.]
Fixtures and appliances. States have different standards regarding what things in a home are included in a home sale, but light fixtures and major appliances are typically included unless otherwise noted in the contract.
Of course, that’s not always obvious to every homebuyer or seller. “There have been numerous times over the years when the seller thought he was taking the TVs and the buyer thought they were staying,” says Tim Elmes, a luxury property specialist with Coldwell Banker Residential Real Estate in Fort Lauderdale, Florida. “As a rule, a fixture is something that’s bolted down, and if it’s not, you can take it.”
As the buyer, it’s important to clear up what’s included in the sale and what’s not — particularly for items like chandeliers and window treatments that may be a significant attraction in the home.
The negotiation also works the opposite way. If you don’t want the seller’s old washer and dryer, you may be able to include a stipulation that they remove the appliances from the home.
Furniture. Unlike appliances, furniture is expected to leave the property when the seller moves out. If you absolutely love the décor, however, you may be able to negotiate a purchase of the furnishings as well.
Most states require the purchase of personal property to appear on a separate contract from the real estate deal, though both contracts can be finalized at the same time. The promise of an additional $50,000 for furnishings, however, may make some sellers more inclined to take a second look at a home offer that’s slightly below asking price.
Move date and leaseback deals. Whether you’re on a tight schedule or you’ve got all the time in the world, the move-in date can be a valuable bargaining chip between buyer and seller. If you’re not in any rush, offer the sellers a flexible move-in date, which is especially appealing in fast-moving markets when the sellers haven’t yet found their next house to buy.
Offer to lease the property back to them for a limited number of days. A leaseback is most likely to occur when the seller is looking to purchase a new home or has a contract on one, “and just can’t line up the two closings in the same day,” Katz says.
In a leaseback situation, the seller would be expected to pay the utilities and upkeep costs while they’re still in the home, as well as any other rent or compensation to cover the mortgage costs before the buyer is able to occupy the property: “Something to make the new owners whole,” Katz says.
[Read: 8 Ways to Avoid Being Disappointed About the Condition of Your New Home.]
Repairs. During the due diligence process, you’ll have the property inspected to discover any potential problems with the home’s structure or condition — whether it’s a leaky roof, cracks in the foundation or mold in the basement. Any issues discovered in the inspector’s report are up for negotiation.
As the buyer, you have a bit more bargaining power here because the property is already under contract, so you can ask the seller to make repairs prior to closing, pay half the cost of the repairs or lower the sale price by an amount equal to the repair costs.
Of course, as with every bit of negotiation in a home purchase, you should always ensure the details are clearly spelled out in the contract. Whether it’s antique wall sconces leaving with the seller or a window that needs to be repaired, you should use the details of the contract almost as a checklist to ensure everything is ready before closing — particularly when you go to take a final look at the house before completing the deal.
“The more thorough you are with the contract, the less chance of an issue at the [final] walkthrough,” Elmes says.
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6 Things That Are Surprisingly Negotiable When Buying a House originally appeared on usnews.com
