Not only is it taking longer to sell homes in the current real estate market, but it’s also taking more time to negotiate most purchase contracts. Factor this into your game plan as you forge ahead in the new home-sale market.

Some people have an adverse reaction to negotiation. They would rather state their price upfront, along with a message to the other party to either take it or leave it. Last year, that approach worked fine. In fact, it was the only option for some buyers in multiple-offer situations; their first offer had to be their best offer or they were out of luck.

There are still pockets of the market where there are more buyers than sellers. But, in most areas, the supply-and-demand equation has shifted from a low-inventory seller’s market to a balanced or buyers’ market with growing inventories of homes of sale.

A common theme of today’s market is that sellers’ expectations are still based on last year’s prices. It’s common to find new listings that are priced too high for the market. If you’re interested in one of these listings, be prepared for a protracted negotiation.

Let’s say you’ve found a home you really like; it’s new on the market and listed at $600,000. You’ve been looking for months and are up on current market values. By your calculations, the house is worth $550,000.

If you offer $550,000, the sellers are not likely to accept it; the listing is too new on the market. One option would be to wait a few weeks before making an offer. The seller might then be more receptive to a lower price.

HOUSE HUNTING TIP: The take it or leave it approach is unlikely to be productive. Most sellers in this market are compelled to counter a low offer in the hopes of selling for more. You could always counter back at the price you offered. But, a more promising approach is to offer less than your top price at the outset. This gives the sellers the opportunity to counter your offer, making them an active participant in the dialogue.

You might start with a very low initial offer of $495,000. But be careful: a seller may flat out reject your low offer unless your offer is otherwise acceptable. Make sure you are pre-approved for financing and understand what other things the sellers are looking for, other than a good price, before you start the negotiation.

Be prepared for the seller to yield little during the first round of negotiation. This sends a message that he’s willing to negotiate, but you’ll have to come up significantly if you want to buy his house. The seller might come back with a counter price of $580,000.

Now you are $85,000 apart-a huge chasm. If you are serious about the house, you should telegraph this to the seller by making a big jump up in price, say to $530,000. The seller came down $20,000. You come up $35,000.

If the seller comes down another $20,000, you’re within $10,000 of your top price. A motivated seller would have a hard time walking away from the transaction if you then offer $550,000. At this point you should let the seller know that this is your top price.

THE CLOSING: Sometimes it pays to take a break from the negotiations. If you feel you’re getting nowhere, step back until the dust settles. With a little time, the sellers may realign their expectations if they realize you are a sincere, qualified buyer and they aren’t likely to do better.

Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Prepare for this fall with top agents & brokers at Connect Now this Tuesday.GET YOUR TICKET×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription