Think Outside the Agent: Clever Things To Ask For When Buying a House
When buying a house, many people are aware that they can negotiate the price. Some might even consider asking for a home warranty to be included in the deal.
Home warranties are a common negotiation point because agents often receive commissions for selling them.
But here’s the thing: you can negotiate much more than just the price and a warranty. From my experience buying many houses, I’ve learned that almost anything is negotiable.
The key is finding things that the seller will agree to because it doesn’t compromise their main objective: selling the house.
I’ve negotiated for kitchen tables, entire sets of furniture, appliances, and even unique living arrangements. By understanding what the seller values, you can make a deal that benefits both parties.
Here are some of the clever things that I’ve negotiated when buying a house. Notice this list isn’t going to include all the usual stuff an agent would tell you to do. I’m not going to talk about asking for repairs and updates.
I’m not going to cover things like whether or not to negotiate leaving the blinds. Instead I am going to give you insights into thinking outside the box. Actually my insights are thinking outside the agent. Agents are not creative. I am.
In fact you don’t even need an agent, but that’s a story for another article.
Table of Contents
1. Appliances and Furniture
One of the easiest things to negotiate when buying a house is the inclusion of appliances and furniture. Many sellers would prefer to leave behind bulky items rather than deal with the hassle of moving them. I’ve taken advantage of this several times.
For instance, in one deal, I managed to negotiate for an entire house full of furniture to be left behind.
The seller was relieved not to have to arrange for the furniture’s transport, and I gained a fully furnished home at no extra cost.
This kind of negotiation is often mutually beneficial, as it saves the seller time and effort while providing the buyer with significant savings on furnishing a new home.
What’s better is if I didn’t want the furniture I could just sell it. Moving furniture and appliances is a problem for the seller. Turn their problem into your benefit.
2. Discount Points for Your Mortgage
One of my favorite negotiation strategies involves asking the seller to pay discount points on my mortgage. Discount points are essentially prepaid interest, and they can reduce the interest rate on your loan.
By lowering the rate, you can save a substantial amount of money over the life of the mortgage.
I’ve successfully negotiated for sellers to cover these points, which has made a big difference in my long-term costs. This tactic works well in situations where the seller might be hesitant to lower the sale price but is willing to contribute to closing costs.
It’s a win-win: the seller maintains the price they want, and I get a better mortgage deal.
Related: Paying Mortgage Discount Points: A Powerful And Misunderstood Option
3. Seller Rent-Back Agreements
In some cases, the seller may need additional time to move out after the sale is finalized. Perhaps they are waiting for their next home to be ready or need time to finalize their plans.
In such situations, I’ve successfully negotiated rent-back agreements, where the seller rents the house back from me for a set period, usually a few months.
This arrangement provides the seller with the flexibility they need while giving me some immediate income after the purchase. It’s a practical solution that can make the difference between closing a deal and losing out on a house.
By offering this option, I’ve often found that sellers are more willing to accept other terms in the deal, knowing they have extra time to transition.
I did this on the first house I bought. I timed the lease with when my own lease would expire at my apartment. What’s even better is I walked away with a few thousand dollars from rent prepayment. Not bad for a house that I bought with $800 out of pocket.
4. Landscaping and Yard Maintenance
Landscaping might not be the first thing that comes to mind when negotiating a house purchase, but it’s definitely worth considering.
If the property has extensive landscaping, you can negotiate for the seller to cover the cost of a landscaping package or even include a season’s worth of yard maintenance.
I once negotiated for the seller to include a year’s worth of lawn care services as part of the deal. For the seller, it was a small concession, but for me, it meant not having to worry about maintaining a large yard during my first year in the new home.
This type of negotiation can be particularly appealing if the seller has already invested a lot in the property’s exterior.
5. Lightening the Mood with a Unique Request
Negotiations can sometimes get tense, especially when there’s a lot at stake. In such cases, a little humor or a unique request can go a long way. One of my most memorable negotiations involved a seller who was growing tired of the back-and-forth.
My offer, though beneficial for them, was complicated, involving raising the sales price while having them contribute to discount points and closing costs. Despite the fact that they would walk away with more money, the seller found the process overwhelming.
I noticed that the seller was a beer collector, so I added a quirky request: that they leave a beer in the fridge for me—any beer, however many or few. The goal was to lighten the mood and make them smile. It worked.
The seller agreed, and we closed the deal. We still live in that house today.
6. Closing Costs and Additional Fees
Closing costs are another area where you can negotiate. These costs can add up quickly, so getting the seller to cover all or a portion of them can be a significant financial benefit. I’ve negotiated for sellers to pay for various fees, including title insurance, attorney fees, and even transfer taxes.
In one deal, I managed to have the seller cover all the closing costs, which saved me thousands of dollars upfront. This tactic is especially useful in a buyer’s market, where sellers may be more motivated to close quickly.
By reducing your out-of-pocket expenses, you can free up funds for other aspects of your new home purchase, such as renovations or new furniture.
7. Personal Property and Extras
Sometimes, there are items in the house that the seller no longer needs or wants. These could include anything from garden tools to patio furniture or even a pool table. I’ve had success negotiating for these types of items to be included in the sale.
In one purchase, I negotiated for the seller to leave behind a high-quality grill and a set of outdoor furniture. For the seller, these items were just one more thing to move, but for me, they were valuable additions to my new home.
Don’t be afraid to ask for extras like this; you might be surprised at what a seller is willing to leave behind to close the deal.
8. Homeowner’s Association (HOA) Fees
If the property is in a community with a homeowner’s association, consider negotiating for the seller to cover the HOA fees for a certain period, such as the first year.
This can help you ease into the financial obligations of homeownership without the added pressure of monthly HOA dues, especially in communities with extensive amenities.
9. Utility Bills and Credits
Utility costs can add up, particularly when moving into a larger home. You can negotiate for the seller to cover utility bills for the first few months or provide a credit towards them.
This small concession can help ease your financial burden during the initial transition period and allow you to adjust to your new expenses gradually.
10. Moving Expenses
Moving can be a costly and stressful process. Sellers who are eager to close the deal may be willing to contribute to your moving expenses. This could be in the form of a credit or even directly paying for a moving company. Negotiating this can significantly reduce your out-of-pocket costs and make the move smoother.
11. Seasonal Maintenance Contracts
If you’re buying a home in an area with extreme weather, consider negotiating for seasonal maintenance contracts. This might include services like snow removal, pool maintenance, or gutter cleaning. Having these services covered for the first year can be a great way to avoid immediate maintenance headaches and costs after moving in.
12. Custom Work and Upgrades
If the seller has started but not completed custom work or upgrades, negotiate to have these projects finished before you close on the house. This could include anything from finishing a basement to completing a kitchen renovation. It adds value to your new home and saves you the hassle of managing construction after you move in.
13. Seller Contributions to Home Improvement Projects
If you plan to make improvements to the property, consider asking the seller to contribute to the costs. This could be in the form of a credit at closing or a direct contribution. It’s a smart way to kickstart your home improvement projects without immediately dipping into your savings.
14. Negotiating a Seller-Financed Second Mortgage
Another creative negotiation tactic I’ve used involves arranging for the seller to provide a second mortgage. This strategy can be particularly useful if you’re looking to minimize your out-of-pocket expenses or if you’re struggling to come up with a substantial down payment.
I’ve successfully negotiated this arrangement a few times, and in one instance, it involved what’s known as a “phantom mortgage.”
How A Seller Financed Second Mortgage Works
A seller-financed second mortgage is essentially a loan that the seller provides to the buyer, in addition to the primary mortgage you obtain from a traditional lender.
This second mortgage is typically secured against the property, just like your first mortgage, but it often comes with more flexible terms since it’s directly negotiated between the buyer and the seller.
The Phantom Mortgage
One of the more innovative deals I negotiated involved a phantom mortgage. In this case, we increased the agreed-upon sale price of the home, which allowed the seller to provide a second mortgage that effectively covered my down payment.
The key feature of this phantom mortgage was that it was forgivable after a certain period, meaning I wouldn’t have to repay it under specific conditions.
This type of arrangement can be highly beneficial if the seller is motivated to sell quickly and you’re looking to reduce your immediate financial burden. By structuring the deal this way, I was able to secure the home without needing to come up with a large down payment out of pocket.
Related: How To Buy a House with Little or No Money Down (I Have Done It)
Benefits of a Seller-Financed Second Mortgage
- Reduced Upfront Costs: By negotiating a second mortgage with the seller, you can significantly reduce or eliminate the need for a down payment, making it easier to purchase the home.
- Flexible Terms: Since the terms are directly negotiated with the seller, you may be able to secure a lower interest rate or more favorable repayment conditions than you would with a traditional lender.
- Creative Financing Solutions: A phantom mortgage, like the one I negotiated, can provide even more flexibility, especially if it includes terms that forgive the debt under certain conditions, such as staying in the home for a set number of years.
- Increased Purchase Price: While the purchase price might be inflated to accommodate the second mortgage, this strategy can still be advantageous if it allows you to secure the home without straining your finances.
While this strategy can be incredibly effective, it’s important to ensure that both parties fully understand the terms and implications of the second mortgage.
It’s also crucial to work closely with your primary lender to ensure that the arrangement complies with all lending and legal requirements.
Seller-financed second mortgages are not common, but they can be a powerful tool in the right circumstances.
Is There A Cap On Seller Contributions?
There isn’t a strict legal cap on what a seller can provide during negotiations, but there are practical and financial limits to consider:
- Lender Restrictions: If you’re financing the purchase with a mortgage, your lender may have restrictions on the types of concessions the seller can provide. For instance, lenders often cap the amount of seller concessions (such as covering closing costs or providing credits) based on the loan type and the size of your down payment. Typically, this cap ranges from 3% to 9% of the home’s sale price, depending on the loan terms.
- Market Conditions: In a seller’s market, where demand exceeds supply, sellers might be less inclined to agree to extensive concessions. On the other hand, in a buyer’s market, where buyers have more negotiating power, sellers might be more willing to provide significant incentives to close the deal.
- Appraisal Considerations: If the negotiated concessions are substantial, they could potentially affect the appraisal value of the property. Lenders require an appraisal to ensure the home’s value aligns with the loan amount. If concessions lead to an inflated sales price or reduce the cash the seller receives, it could complicate the appraisal and loan approval process.
- Seller’s Financial Situation: The seller’s ability to provide concessions also depends on their financial situation and motivation to sell. For example, a seller with limited equity in the home might not be able to afford to cover extensive closing costs or other financial incentives.
- Legal and Contractual Limits: Depending on the jurisdiction, there might be local laws or regulations governing the extent of concessions a seller can offer. Real estate contracts often specify what can be included in negotiations, so it’s essential to ensure any concessions are legally compliant.
While there’s no absolute cap, the extent of what a seller can provide is influenced by lender guidelines, market conditions, the appraisal process, the seller’s financial situation, and local regulations.
Final Thoughts
When buying a house, negotiating is not just about getting the best price. It’s about creatively structuring a deal that benefits both you and the seller. By focusing on what the seller values and presenting your requests in a way that doesn’t seem burdensome, you can walk away with much more than just a new home.
Whether it’s securing a great mortgage deal, getting a house full of furniture, or even just making the seller smile with a quirky request, effective negotiation can make your new house feel like home from the moment you step inside.
The key is to approach the process with a clear understanding of what you want and a willingness to be flexible in how you get it.
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