With demand for homes outstripping supply, we have seen many buyers forced into bidding wars, all the while sending prices through the roof in the past couple of years. But even in a seller’s market, there is almost always some wiggle room for negotiation. As the housing market begins to cool down this year, it is important to know what elements are negotiable. Here are some of the most common elements to negotiate when buying a home:

Pricing: while this seems obvious, negotiating down the price of a house is common in most transactions. If you are going to ask for a lower price, make sure to base your offer on factors such as comparable properties, appraisal reports, home condition, and the current local market.

Earnest money deposit: upon going under contract, a buyer is usually asked to put down an amount of money to show the seller that they are serious about buying the home. If the buyer backs out for any reason other than due to a failed home inspection or contracted contingencies, the seller keeps the earnest money. Earnest money deposits range from 1–10% of the sales price depending mostly on market interest. In hot housing markets, a higher amount may help strengthen your offer, so keeping a finger on the pulse of your local market is key.

Mortgage rate and closing costs: different lenders have different mortgage programs and different rates. Factors that determine interest rates include credit score and home price, both of which are among the most significant influencers. Talk to your lender about their best possible rate. In a buyer’s market, you could likely also get some of the closing costs paid by the seller.

Cash back at closing: by agreeing with the seller to pay slightly more for a property than its true market value, you can borrow more money than the home is worth and receive the excess proceeds in the form of cash from the seller. Cash back incentives can help buyers cover closing costs and repairs or remodels, for example.

When you are ready to purchase a home, we can discuss your expected rate and the best time to lock in your rate. Please call me today to set up an appointment.