Buying a home is a huge financial transaction, one you may do only once or twice in your life. So it’s understandable you might wonder if you’re botching the job. Is the home you picked a good investment? Or did you perhaps wimp out too soon while negotiating your price? Will you make back your money, or a beating down the road?
Realtor.com decided to go to the pros – bankers – and get some of their tricks and tactics for landing the best deal. So here is what they have to say :
Learn what matters to the other party
The most important negotiation skill for a banker is to understand what is important to the other party, and to be willing to compromise. In a successful negotiation, both parties end up feeling like they gave up some things, but retained some other important items. So rather walk away from the deal, figure out what is going on and how to deal with it.
Don’t be afraid to walk away
Sometimes you need to walk away from the table. One example from a banker is both parties hitting a stalemate on an offer price, but the seller not caving. You can stop negotiating for a little away, look at more houses, then come back – and perhaps, both sides can come to an agreement. While this move takes guts, it was based on research. The banker knew that the house was on the market for about a year, and weighed the impact of the fact that it was winter, when fewer home buyers would be looking. While you cannot always eliminate all risks, the banker knew the odds were in his favor.
Keep emotions in check
While home buying often feels like a psychologist roller coaster, it’s best for prospective home buyers to be a lot less emotional and more analytical. Some of the questions buyers should ask themselves include : What is my risk? How long will it take to get back my return? What is the likelihood of getting back that return if something goes wrong? But, this doesn’t minimize the importance of establishing trust. Even in a world of sharks, bankers are still trying to get people to trust them. If a seller sees you are being reasonable and wants to make a fair deal, they will deal with you in kind.
Get backup
Bankers know there is strength in numbers – so if you can’t accomplish a goal on your own, call in reinforcements! One example from a bank is that she referred her daughter to a housing counseling agency that works with various lenders, since her income limited her options. The agency can help with down payment assistance programs, and can provide new buyers with some needed muscle. They will be able to match new buyers to programs they may qualify for with their limited income. They can educate new buyers on homeownership – and knowledge is power!
