Making an offer on a home can be a thrilling experience. You finally found “the one,” and you’re ready to make your move! However, in today’s market, you often have to go above and beyond the asking price just to get the seller’s attention. With values still high, finding the sweet spot when making an offer on a home is more important than ever. In this blog post, we’ll look at some essential questions and how you can negotiate with a home seller to get the best deal possible for you and your family!
Deal Making Like It’s a Business Deal (Because it IS)
It’s easy to think of buying a home in terms of what you want and what you are willing to pay for it all. However, to get the best bang for your buck when buying a home, you may want to consider looking at homes that others may miss.
Some homes may not have the curb appeal you want, but within a few weeks, you could repaint or pull out carpet and have the beautiful home you want! Consider whether you need the perfect home that is turn-key ready or if you can put a bit of sweat equity in.
When you do some work on a home, you’re essentially giving yourself the gift of home equity. In other words, your home quickly has greater value than what you bought it for or spent on it in upgrades!
Making a Deal to Buy a Home: Factors to Put You Ahead
If you’ve found the home of your dreams, you’ll also need to understand the key negotiation factors involved that will help get your bid accepted! Often, you will have to go above and beyond the asking price just to get the seller’s attention.
The bargaining table is difficult to get to in real estate these days. To make it to the negotiations, as a buyer, you have to come up with a strategy to buy in from the beginning.
If you work with a local real estate attorney, they can help ensure you don’t run into critical contract issues during these early negotiations. The right tactics early on can help you make a deal with a home seller while other buyers fall away.
You can gain the advantage by looking at homes that are affordable for you. This gives you room for negotiating with the other party on side. Ultimately, you may need to offer option fees to really get a seller’s attention.
However, as long as you don’t renege, your money is safe and usually goes toward the good deal you made. When you show you’re serious to the relevant parties, they assign more value to your offer. An option fee does just that.
Most people will offer a higher bid on the home itself, which can also bring success. However, option monies are a type of trust building. It’s money in their pocket now! Research shows that a 1% option fee can help a seller choose your contract over others!
The sellers see that they matter to you and that you care about the outcome! They also know that you will lose the money if you back out. That’s why the seller may then give you a longer option period.
And a higher offer for your option fee can bring on the crucial point in talks when a buyer sees your commitment and says yes to your offer!
Before deciding on an offer or an option fee, however, talk with your real estate attorney and ask important questions in advance. Creating a negotiated deal without knowing what to expect is never a good idea. And you don’t want to make a deal happen if you’re still unsure how you will manage the purchase!
Once You Have a Negotiated Agreement, There’s Still Wiggle Room
Typically, in the housing market in Houston, you can expect to face complex negotiations in 2023. That’s because it’s a hot market, even with the potential recession looming.However, once you have your deal on the table, you and your real estate attorney can make some strategic planning plans for whether bargaining power is still on the table.
Texas has a unique provision in real estate contracts known as the Option Period. This set number of days grants buyers the freedom to cancel their contract for any cause whatsoever.
Your real estate attorney can write this option period into your real estate contract. According to HAR, you have “the right to terminate the contract within a certain number of days for a specified price without risking the earnest money deposit.”
The Texas Real Estate Option Period:
- Provides security for the buyer.
- Has an agreed-upon number of days.
- Starts at the beginning of the purchase contract period
- Requires consideration – a non-refundable fee paid to the seller called the Option Fee.
- The property will be placed in OP (option pending) status in the MLS.
- Ends at 5 p.m. local time.
- Can be extended by mutual agreement of the buyer and seller. (1)
Using an Option Period to Get Even Better Deals on a Home
So, how can you use an option period in your favor? If the seller wants to sell a home that is not turn-key ready, they may be willing to agree to a lower price if you are making a bid that is already close. You may get an option period without paying a significant amount of earnest money or an option fee.
And you can still have the security of backing out of the deal without significant losses.
An option period allows buyers and sellers to mutually agree on making changes or extending the date so they can come up with a deal making a better agreement before making a firm commitment.
In short, negotiating and making a deal when buying your dream home isn’t as intimidating as it may seem. You can get the most out of your purchase with the right strategy and a knowledgeable real estate attorney.
Work With an Experienced Real Estate Attorney
Working with an experienced real estate attorney is key to making successful contract negotiations when buying a home in the volatile Houston market. An experienced professional can provide advice on negotiating tactics and making sure your rights are protected throughout the process.
Your attorney can also help protect your key interests, even in complex deals! They can find the best alternative if something falls through and create the deal you want. A Texas real estate attorney can help you understand exactly what is in your negotiation package and how it can benefit each party and you as your offer takes center stage.
At the end of the day, making a good deal isn’t just about getting the best terms from the other side – it’s also about making sure you protect your resources and have legally focused security in your agreement should an unexpected change occur.
Working with an attorney can give you peace of mind knowing that your real estate transaction is properly and safely written up. With their guidance, making a deal on your dream home could be much easier than expected!