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How to Get the Best Deal on Your New Home

Even in a buyer’s market, it pays to be prepared.
In many places around the country, the real estate market is considered “soft,” with more houses for sale than there are buyers willing and able to purchase them. And while this may cause angst for sellers, it places buyers in an excellent position to negotiate a good deal.

But take note, buyers: If you’re on the hunt for a housing bargain, a buyer’s market alone may not guarantee your success. Follow these tips and take your negotiation skills up a notch to make sure you get the best possible deal on your new home.

Be informed.
Find out everything you can about the property. Compare the asking price with what other homes in the neighborhood are selling for or have sold for recently. Your real estate agent can get this information with a Comparable Market Analysis.

Find out why the owners are selling and how long the property has been on the market. If the sellers already have purchased or made an offer on another home, they might be open to negotiations. Likewise, a divorce, death in the family or other personal situation could raise the willingness of the sellers to accept a lower offer.

USAA’s Home Circle™ Can Help
If you’re plan on starting soon on home negotiations of your own, keep in mind that USAA’s Home Circle™—a one-stop home shop that helps you find, buy, sell, rent and more—can help you:

Learn what other homes are selling for.

Get pre-approved for a mortgage so you know how much you can afford and the seller sees you are a well-qualified buyer.

Find a preferred agent through MoversAdvantage®.

USAA members Amanda and Steven Allen, first-time homebuyers in their late 20s, had been home shopping for several weeks when they recently found the home they wanted.

“We figured an initial offer based on the comparables,” says Amanda. “We took the average price per square foot for other sales in the neighborhood and multiplied our square footage. That was the starting price before we got inspections and considered anything else we wanted from the seller. It was a place to start.”

The Allens also discovered that the property was the former home of the sellers’ mother, who had moved to a nursing home.

“There was some sentimental value for them, and we took that into consideration,” Amanda says. “It seemed to help that they knew we would care for the property.”

Be prepared.
“I recommend that potential buyers secure pre-approval for a home loan,” says June Walbert, CERTIFIED FINANCIAL PLANNER™ practitioner with USAA Financial Planning Services. “There’s no sense in estimating what you think you can afford and entering negotiations if it’s not realistic.”

She also recommends making sure your credit is as stellar as it can be when you start the mortgage hunt.

“You don’t want to get your hopes up for a home if your credit is not up to par or if your income doesn’t warrant a home in a certain price range,” she says.

Walbert goes a step further and recommends buying a home you can afford on one income even if you’re a dual-income family because “a lot can happen: job loss, death, divorce or deciding to stay home after having children.”

“It’s best to have something you can live with in case life throws a curveball,” she says.

Another suggestion: Get an inspection from a trade professional you trust.

“Hire an independent inspector—one not affiliated with the lender or the seller—who can be your eyes and look out for your best interests,” Walbert says. “Try to be there when the inspector is at the home, and ask a lot of questions.”

When an inspection of the Allens’ new home uncovered several issues with the heating, ventilating and air-conditioning system, crawl-space insulation and plumbing, they negotiated to have those problems fixed. The result—about $30,000 worth of work, including a new HVAC unit, before they closed on the home.

Be reasonable.
Even with paperwork in order and information in hand, the actual negotiation moment can be intimidating. But Walbert notes how important it is to keep anxiety and emotion as low as possible.

“While you may ‘love’ a particular house, this is a business transaction, and it helps to view it that way,” she says. “Leave the emotion out of it as much as you can. Think of it objectively.”

A willingness to meet the sellers halfway can help, too. For instance, it is acceptable to offer a price from the lower range of the Comparable Market Analysis, but low-balling with an insulting figure can ruin the deal.

Be wise.
“No one does your bidding like you do,” says Walbert. “The real estate agent puts in the official bid, but you are the one who knows what the home is worth to you. Stick with that price. Your real estate agent is your advisor, but you know what you’re comfortable with. If you can’t see yourself living in the home for five to 10 years, maybe it’s not the best thing to do at this time.”

Walbert also cautions prospective buyers to get everything in writing.

“Get a good faith estimate, get closing costs considerations on paper, get every offer spelled out,” she says. “That’s your due diligence.”