Negotiating Advice For Home Buyers


Whether you’re 25 or 65, one thing’s for sure: Home ownership, raising a family, and having enough money to retire comfortably takes a lot of money! Surprisingly, a high percentage of people of all ages have not accumulated a sufficient nest egg for their future needs.

What many homeowners (and aspiring homeowners) don’t stop to realize is that there are many opportunities to save money, reduce expenses, and keep more of your hard-earned cash where it belongs: in your pocket, bank account, or retirement plan. While it may seem like your money flies out the window as fast as you can earn it, you may be overlooking some key strategies for holding on to more of it. One of the most powerful tactics for saving and making more money is learning how to negotiate effectively.

Practicing the Art of Negotiation

Virtually “everything is negotiable,” especially in real estate transactions. Fortunately, you can rely on a good real estate agent to look out for your interests and get you the best deal. However, it is generally to your advantage to have a basic understanding of negotiating principles and the possibility of winning concessions from the other side.

Perhaps the number one thing to keep in mind when attending an open house or touring a home you’re considering buying is to choose your words carefully — particularly if you’re in the presence of the seller’s agent or the home seller, themselves (Note: If you’re just viewing the house with your buyers’ agent, you don’t have to worry about weighing your words or being too effusive.) As an example, if you blurt out “This house is absolutely perfect!” or “This is exactly what we’re looking for!” then you’re putting yourself at a strategic disadvantage when it comes to making an offer on the house. It pays to “play things close to the vest.” That expression, of course, originated from the game of poker, in which it’s a tactical error to let your opponents see your cards.

There are dozens of situations in life where negotiating skills can help you gain hundreds, if not thousands of additional dollars from a transaction. Examples range from negotiating a raise or a starting salary to buying or selling real estate or automobiles. By developing your negotiating skills and practicing them at every opportunity, you’ll find yourself gaining financial and other advantages that wouldn’t otherwise be available to you. As the poem “My Wage” by Jessie B. Rittenhouse reminds us, if we bargain with life for pennies, then that’s exactly what we’ll get in return.

By negotiating the best possible deal in real estate transactions, automobile purchases, home improvement contracts, employment opportunities, credit card interest rates, and dozens of other situations, you can build up a larger retirement nest egg, help your kids pay for college, and achieve a greater measure of financial security.

Planning for Money Milestones

In the course of a lifetime people encounter many money milestones. It can be difficult at times to know what to do with our money when we go through significant changes in life. Here are some of the major money milestones people encounter:

Marriage: According to TheKnot.com, Americans spend an average of $27,000 on a wedding. So vow not to start off your marriage in debt. Curb spending on the big day by cutting expenses where possible.

Buying a Home: Experts recommend saving for a 20% down payment for a home. Make sure to shop for a home loan and plan to spend no more than 30% of your taxable income on housing.

Starting a Family: The average cost of raising a child is $235,000, not including college. Plan your household costs to increase 10 to 20% with the addition of a baby.

Getting a Divorce: Divorce is expensive. Build a team of professionals who are knowledgeable about the implications of divorce, you will need a lawyer, accountant and financial advisor.

Retirement: 56% of Americans ages 18 to 34 aren’t saving for retirement. Take advantage of your employer’s 401(k) or other sponsored retirement plan. A good plan is to save five percent of your income.