by Maurie Backman | Jan. 27, 2021
Can't afford today's inflated home prices? You still have options.
Historically low mortgage rates are driving buyer demand for homes. As such, it's very much a seller's market. Low housing inventory has allowed sellers to charge a premium for their homes, and buyers are biting left and right.
If you really want to buy a home but the listing prices in your target neighborhood are daunting, don't worry -- you may have more negotiating power than you think. Here are a few things you can do to get a seller to lower a home's price.
Many people can't afford to buy a home outright -- that's what mortgages are for. But if you happen to be in a situation where you can pay for a home in cash, doing so could get a buyer to agree to a discount.
The problem with mortgages is that they have the potential to fall through, leaving sellers in the lurch. What's more, mortgages can take weeks to close on, and some sellers may want to get their homes off the market more quickly. For example, if you have a seller who needs to relocate in a few weeks for a job, he or she may be willing to accept a lower offer if it means finalizing that sale without delay.
This is one of the top lenders we've used personally to secure big savings. No commissions, no origination fee, low rates. Get a loan estimate instantly and $150 off closing costs.
Underwriting is a standard part of finalizing a mortgage, and it's basically the process of verifying your financial information to ensure you're a qualified loan candidate. But underwriting can take time, which can delay a closing.
If you want to get a seller to agree to a lower sale price on a home, find a lender that offers upfront underwriting. With upfront underwriting, an underwriter reviews your financial information when you first apply for your loan, as opposed to midway through the process. Having this step done early makes it more likely that your closing will move quickly, and that's definitely a draw for sellers. (Getting pre-approved for a mortgage will achieve a similar goal, but upfront underwriting is a more involved process that takes that benefit one step further.)
Though homes today are high in demand, you never know when a specific seller may be struggling to find a buyer. If you see a home that's been sitting on the market for quite some time, the seller may be growing increasingly desperate. If you made a lower offer that was rejected, threaten to walk away. The seller may agree to come down on price to keep you from moving on.
If you're hoping to pay a rock-bottom price for a home, today's market isn't ideal. But that doesn't mean you can't shave some money off the cost of a home you buy. Even if you're only able to talk a seller down from, say, $299,000 to $295,000, that's still $4,000 less you have to pay. Don't hesitate to negotiate a sale price that works better for you, because while sellers today do have an advantage, they still need buyers to take their homes off their hands.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
Our expert recommends this company to find a low rate - and in fact he used them himself to refi (twice!). Click here to learn more and see your rate. While it doesn't influence our opinions of products, we do receive compensation from partners whose offers appear here. We're on your side, always. See our full advertiser disclosure here.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.