Currently, it is a buyer’s market for real estate.  What this means is that there are more homes for sale than there are buyers for the homes. A buyer’s market enables a first time or second time homebuyer to negotiate on their terms. This means that the purchaser can negotiate the closing costs, home inspection fees, a home warranty, and home improvements. Before you make an offer to purchase a house, it is important that you discuss negotiations with your real estate agent.

Negotiating closing costs

One of the greatest benefits of a buyer’s market is that it enables the purchaser to negotiate the closing costs. Closing costs are the fees that are associated with the purchase of the home including title fees, pre-paid interest, as well as mortgage recording costs.  The closing costs are paid at the time that the loan papers are signed and if the buyer is paying them, they are added to the mortgage or collected at closing.  A purchaser of a home can request that the sellers pay a portion or all of their closing costs.

Also, a purchaser can ask a seller to give them a percentage back at the time of closing. For example, if a home costs $150,000, a purchaser can request that the seller give them three percent back on the day of closing. This means that around $5000 or more will be deducted from the purchaser’s closing costs. The percentage back can also be given in the form of a check on the day of closing or applied to the closing costs. Remember, a buyer’s market enables the purchaser to purchase a home on their terms.

Negotiating the cost of the home inspection

Before you purchase a home, you should consider having a home inspection performed. A home inspection can identify a deal killer
when purchasing a home. Some home inspections are a cinch, finding nothing wrong with the home, while other home inspections find structural damage and more. A typical home inspection is designed to review the interior and the exterior of the house. This includes the wiring, foundation, structure of the house, water damage, pest damage, etc.

In a buyer’s market, a purchaser can most often negotiate with the seller as to who is responsible for paying the home inspection fee. This can save the purchaser several hundred dollars. If the purchaser does not like the results of the home inspection, it is recommended that they walk away from the home or have the seller either fix the problem or reduce the price accordingly.  Even after a home inspection is done, often the buyer negotiates with the seller and has the seller purchase a home warranty. A home warranty can cover any issues that may go wrong after the purchase of the home.

If the purchaser notices things that need to be repaired, for example drywall that needs to be finished, sockets that need to be replaced, or a dilapidated porch, do not hesitate to negotiate home improvements with the seller. The purchaser has the power to ask the seller to fix certain things before purchase of the home is finalized. In a buyer’s market remember that the purchaser holds the reigns.

If you are interested in purchasing a home, contact your real estate agent to negotiate the terms of the purchase. If you are working without an agent, you can always ask a real estate agent for advice. Homebuyers should take advantage of the many benefits of a buyer’s market – negotiating now can save you thousands of dollars in the long-term.