How to Negotiate a Home Purchase in MN
Whether you are working with a Realtor, representing yourself, or having the listing agent represent you and the seller, we hope you will benefit from our Minnesota home buying and negotiating advice.
Find out as much as you can about the seller.
Why is the seller selling? If you can determine why the seller is selling, you can structure the terms of your offer to entice them. Our advice is to play your cards as close to your chest as possible. One of the best ways to do this is to work with a Realtor with a reputation for being a fierce negotiator.
Keep your intentions and emotions to yourself.
Do not let the sellers or their agent know how much you like the house or why you offer. As a listing agents representing the seller, we are trained to ask questions of the buyers and their agents to determine how to advise our sellers. If we know how badly the buyer wants to purchase the house or why they want to buy it as sellers, we have the upper hand.
Have a backup house in mind
When a buyer has another house in mind, it is easier to be a more formidable negotiator. If the sellers feel that this is the perfect house for you and that you will do anything to buy it, they have the upper hand. If the seller feels like you have another home that you will be just as happy with then, you will have the upper hand. This is especially true if you do have a backup house in mind.
Take what the seller and the listing agent say with a grain of salt.
Some sellers and agents are entirely genuine in their marketing and sales techniques, and others will exaggerate, manipulate and use every sales trick they know. By law, the sellers have to fill out a seller's disclosure and disclose any material facts they know that would affect your use and enjoyment of the home. It is crucial to take this information with a grain of salt. Some sellers conveniently forget, and others do not notice or consider specific problems worthy of disclosing.
Hire the best inspector in town but know their availability first
Before determining how many days you will require in your inspection contingency, you should see the inspector's availability that you want to inspect the house. Some of the best home inspectors in the Twin Cities will be booked solid for up to 10 days.
Consider the motivation for the advice your real estate agent gives you.
Unfortunately, a high percentage of real estate agents put their interests ahead of their clients. If a Realtor is desperate for a commission check, they can justify doing or saying just about anything. Unethical realtors give clients advice that is intended make their job as easy as possible. Some real estate agents will suggest that their buyers use sure inspectors that they know will work hard to "keep the deal together." Some real estate agents will tell buyers not to get a radon test or, worse yet, don't get an inspection at all. Some real estate agents get kickbacks or other incentives from the people they refer business to. It is a red flag if the agent pushes you to use a particular inspector, mortgage broker, title company, or contractor.
Call the Police
Before offering a home, townhome, condo, or land in Minnesota, it is wise to contact the local police department and ask them questions about the neighborhood.
Do a Comprehensive Market Analysis aka CMA aka Comparative Market Analysis
Ask your agent to provide you with an analysis of the home you are considering writing an offer on. It is best to be with your agent and have them show you how they are doing the analysis and choosing the comparable properties to use for the examination. This way, the agent isn't tempted to manipulate the study to justify their advice or might be tempted to give.
Know the numbers
Discuss ALL of the numbers with your mortgage professional to make sure you know exactly how much the closing costs will be and exactly how much your monthly payments will be.
Get a second opinion from The Minnesota Property Group of RE/MAX Results.
These are just a few of our tips, tricks, and snippets of advice when buying a home in the Twin Cities Metro Area of Minnesota. We are happy to help you analyze the market, the property, the offer, and the strategies to help you put your best foot forward.