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How to Get a Great Price on a House

Purchasing a home with VA Loan

To swing a deal in today's buyer's market, it pays to sharpen your negotiation skills.

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 to purchase them. And while this may cause angst for sellers, it places buyers in an excellent position to negotiate a great deal.

But take note: If you're on the hunt for a housing bargain, a buyer's market alone does not guarantee success.

Follow these tips offered by June Walbert, CERTIFIED FINANCIAL PLANNER™ practitioner with USAA, to take your negotiation skills up a notch and get a great deal on a 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 comparative market analysis. Ask how long the property has been on the market.
  • Gather information about recent repairs and improvements or renovations. This will give you an idea of how much the seller has invested in the property. Read the seller disclosure document and take note of details, such as the age of the roof. A home inspection will provide additional insight into the condition of the property.
  • Inquire about why the home is being sold. If the sellers already have purchased or made an offer on another home, they might be open to negotiations. Likewise, a divorce, job change or other personal situation could increase the willingness of the sellers to accept a lower offer.


Be Prepared

  • Make sure your credit is as stellar as it can be before you start the mortgage hunt. The higher your credit score, the better the chance you'll get a good deal on a home loan.
  • Secure preapproval for a home loan. There's no sense in entering negotiations when you don't know if your income qualifies you for a home in that price range.
  • Look for a home you can afford on one paycheck even if you're a dual-income family, because a lot can happen: job loss, death, divorce or one parent deciding to stay home with the children. It's best to have a payment you can live with in case life throws a curveball.
  • Get a home 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. Be there when the inspector is at the home, and don't be afraid to ask questions. A thorough inspection of your future home can often uncover problems that, through negotiation, can be fixed by the seller before you close on the property. The result could be a savings of hundreds, if not thousands, of dollars you might later have paid for repairs and new equipment.


Be Reasonable

Even with paperwork in order and information in hand, the actual negotiation process can be intimidating. To keep anxiety as low as possible:

  • View the purchase as a business transaction. Leave emotion out of it as much as you can. Approach the situation objectively, and don't take the negotiations personally.
  • Meet the sellers halfway. For instance, it is acceptable to offer a price from the lower range of the comparative market analysis, but low-balling with an insulting figure can kill the transaction. And don't ask the seller for multiple concessions, such as a lower price, repairs and payment of the closing costs. You may be more successful getting the seller to agree to one negotiating point, such as the lower price.


Be Wise

  • Know what price you're comfortable with and stick to it. Your real estate agent puts in the official bid, but you are the one who knows what the home is worth to you and what you can afford.
  • Get the offer in writing, including a good-faith estimate -- so you'll know all the fees and terms of your mortgage -- and closing costs.

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Contributor

USAA, a diversified financial services organization, is the leading provider of competitively priced financial planning, insurance, investments, and banking products to members of the U.S. military and their eligible families. Rated among the highest among financial services companies for customer advocacy in a Forrester Research survey, USAA provides convenient and accessible financial products to its more than 9 million members. For more information about USAA, or to learn more about membership, visit usaa.com

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