There is much more to negotiating the price on a real estate transaction than meets the eye. Negotiating price and other critically important terms in your transaction is full of traps for the unwary buyer. My father told me when I was only 14 years old, “Never assume you know something you do not. It could cost you your life.” I grew up in a cabin in one of the coldest regions in Alaska, and my father was talking about the dangers of living in the harsh climate of Alaska. In the ’60s and ’70s we saw many cheechakos travel to Alaska from the “lower 48” assuming they knew enough to survive the cold and the wilds of the Last Frontier. Some did not survive. Others lost everything and went home. Granted, buying a home in Sequim or Port Angeles is not like surviving in the Alaskan wilderness in a cabin for a full winter. But assuming that you are a master at negotiating the purchase of real estate (if you are not) could have its own disastrous consequences.
Negotiating Price
Negotiating to buy your retirement home, presumably the last home you intend to own, requires knowing several very important pieces of information. To effectively negotiate, you must start at the right price (within a range) and with the right terms. That means having a good grasp of property values and fair market value for a home like the one you want to buy, and how to evaluate the listed price. Starting from a position of strength means you will need to know the strength or weakness in the market for homes like the one you want to buy. It means knowing the specific area where this home is located, the issues of concern that may arise in that area regarding drainage, well water, and septic systems. Don’t forget to consider Internet access, since not all homes have high speed Internet, and you’ll want to know how many bars Verizon gets in that area. After all, who can survive without cell phone coverage? But there are a hundred issues to consider when buying real estate, and all of this must be part of your repertoire of knowledge and experience. If they are not, you negotiate from a position of weakness and with a huge disadvantage.
Negotiating Like a Pro
There are many due diligence issues that need to be addressed to protect you from buying a nightmare. At this phase in your life, you definitely don’t need to get involved in a financial disaster or a legal battle with the seller. If issues do come up during the home inspection, the well or septic inspection, or your own due diligence on other issues, you must know exactly how to handle the negotiating on those issues.
As a buyer, if you have a lifetime of experience negotiating real estate and are familiar with local issues, you are ready to start negotiating. But if you do NOT have a lifetime of experience negotiating–specifically real estate–don’t start negotiating without an expert in your corner. There’s too much money at stake–your money! You never have to worry about underpaying. Sellers do not underprice their homes. But you do have to worry about overpaying. Sellers want you to overpay, and Realtors all make a commission at any price.
Last Updated on August 2, 2022 by Chuck Marunde
