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The kind of market you’re in will dictate your negotiating strategy. Be aware that in most places, the days of lowball bids that were common during the housing bust are over.
In neighborhoods where homes are scarce and demand is high, chances are you’ll be one of multiple bidders. In that environment, you’ll need to bid the asking price or even 1%-3% higher to win the deal.
In areas where home sales are slow, the reverse is true. Study the property’s history to see how long it’s been on the market and whether there have been any price cuts. You might start with an offer 8%-10% below the listing price.
Either way, you want to go into battle armed with facts. Your agent will research recent home sales, including the difference between what the seller asked and what the property actually fetched. The agent also will try to glean as much as possible about the sellers—are they in a hurry? Tired of the process? The same seller who dinged a bid 10% below asking two months ago may be ready now. “Be ready to be aggressive,” says agent and Zillow blogger Brendon DeSimone.
Remember that there’s more to negotiating than just price. Being able to close quickly makes you attractive to an anxious seller, who will be more likely to accept a lower offer. You’ll improve your bargaining position if you’ve secured financing and attach as few conditions as possible to your offer.