The Art of Negotiating

You've partnered with an agent, shopped for a lender, viewed home after home, and finally identified the house of your dreams. Now it's time to make an offer for it.

Your agent should provide you with a Comparable Market Analysis (CMA), which can inform your decision on what figure to offer. CMAs display the selling prices for similar properties, along with the listing prices for comparable homes on the market. It's the former number you'll want to pay attention to. Houses, like cars, are often sold for a different number than what they're listed at. So much like your last trip to the car dealership, you should expect plenty of back and forth haggling to come. Use the CMA to find a fair number to present ? nothing kills negotiations faster than a low-ball offer.

Once you've decided on a number, your agent will draw up a purchase agreement, including your pre-qualification or secured financing letter, earnest payment, and any contingencies you request. You may include a deadline or expiration date, framing the amount of time the seller can consider the offer before accepting, declining, or countering it.

You may strike oil and have your initial offer accepted; but more likely, the seller will modify your offer with altered contingencies and a new (read: higher) price, and send it back for your review. From there, you can accept the modified offer from the seller, or present a counteroffer. It can become a "Wash, Rinse, Repeat" sequence until one side either accepts or walks away.

As with any negotiation process, you should be open to compromise. The most successful deals happen when both sides meet as close to the middle as possible.