8 Essential Tips for Negotiating Your Offer and Closing the Deal

You’ve done the research, and now it’s time to put it all into action.

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Picture this: Your offer is flawless, the seller accepts without question, and your biggest worry is deciding between a blush or emerald green couch for your new living room.

While that dream scenario does happen, the reality is often more complex. Sellers might counteroffer or reject your initial bid, especially in competitive markets or when your offer is on the lower side.

If negotiations are required, your real estate agent will guide you through the process, deploying strategies to help you secure the best deal. But understanding the rules of engagement can help you contribute to the process and make informed decisions.

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Here are eight key strategies to prepare for successful negotiations:

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1. Act Quickly

When you receive a counteroffer, aim to respond within 24 hours. The longer you wait, the more time you give another buyer to swoop in. Delays can also make sellers second-guess their counteroffer.

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2. Adjust Your Price Strategically

If your initial offer was low, you might need to raise your bid to stay competitive. Use your agent’s expertise and market comparables (comps) to decide on a reasonable increase.

Be mindful of your financial limits. Stick to your budget and avoid overextending yourself. Your counteroffer should reflect not only the home's value but also your comfort level in spending.

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3. Increase Your Earnest Money Deposit

A higher earnest money deposit signals to the seller that you’re serious about the deal. Consider offering 3% to 4% of the sales price instead of the typical 1% to 3%. This gesture can make your counteroffer stand out.

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4. Be Flexible with Possession Dates

If the seller needs more time to move out, accommodate their timeline. Propose a later possession date or offer a rent-back agreement where they can stay in the home temporarily after closing.

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5. Reduce Contingencies (Carefully)

Minimizing contingencies can make your offer more appealing to the seller. For example, you might waive a home sale contingency if you’ve already secured funding.

However, think twice before waiving critical protections like home inspections. Reducing contingencies is a balancing act between risk tolerance and market dynamics.

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6. Trim Back Concessions

If your initial offer requested concessions like closing cost assistance or repair credits, consider reducing or eliminating these asks in your counteroffer. This puts more money in the seller’s pocket and strengthens your bid.

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7. Cover the Home Warranty Yourself

If the seller offers a home warranty, consider waiving that perk and buying one yourself. It’s a relatively small expense (averaging $1,049) but can sweeten your offer in the eyes of the seller.

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8. Know When to Walk Away

Sometimes, the best move is to walk. If the seller’s counteroffer stretches beyond your comfort zone or makes too many compromises, trust your agent’s advice and your instincts.

Negotiating can be draining, but it’s better to move on than to settle for a bad deal. There’s always another opportunity waiting.

With these strategies in mind, you’ll be better equipped to navigate the negotiation process, secure a fair deal, and take one step closer to owning your dream home.