5. Negotiate Terms and Contract

Making the Best Deal: Why Making the Deal is a Big Deal

Once you’ve found the home you want to place an offer on, the next step is reaching an agreement with the owner about the price, how and when you can buy it. Throughout this process, there are many important considerations that can impact your finances, tax situation, and legal obligations. When you consider that you will live with the decisions you make about these issues-perhaps for a long time-just how big a deal your home purchase is becomes obvious.

Your buyer’s representative can help you navigate the way through much of the transaction process, but will also advise you to consult legal and tax experts.


Assess your negotiating position prior to making an offer. Here are some basic rules to help you. You are in a strong bargaining position (the seller will look favorably on your offer) if:

  • You are an all-cash buyer.
  • You are pre-approved for a mortgage.
  • You do not have a house you need to sell, or other contingency that must be met, before you can purchase the home.

With these factors in your favor, you may be able to negotiate a reduction on the listed price. On the other hand, in a “hot” seller’s market, if your “perfect” home comes on the market, you may want to offer the list price (or more) to beat out other offers.

It may also be helpful to find out why the house is being sold and if the seller is under pressure to close a deal quickly. Consider that:

  • Every month a vacant house remains unsold represents considerable added expense for the seller.
  • If the sellers are divorcing, they may just want to close quickly.
  • An estate sale often yields a bargain in return for a promptly closed transaction.