Most people are familiar with the negotiations that go on at the beginning of a real estate transaction—the initial offer and counter offer phase—but did you know there are actually three points of negotiation during a real estate transaction? If that sounds scary, don’t worry! We’re here to help make some sense of it all.

1. The Initial Offer

Picture this: you’ve found the perfect home in Fishers or Carmel, and you’re ready to make your move. Cue the initial offer… it’s like the opening act of a great show. As a buyer, you want to snag a sweet deal, but you also don’t want to lowball and risk offending the seller or losing out to another higher offer. Sellers, on the other hand, are looking to fetch the best price for their beloved abode, but too high a price would exclude buyers or risk the property coming in under appraisal value. It’s a delicate dance of give and take, where finding that sweet spot is key. Remember, it’s not just about the dollar amount—buyers should be sure to consider all the terms and contingencies when putting the initial offer together. Here are the top 5:

• Price
  This will change greatly depending on whether you’re in a buyer’s or seller’s market
• Closing costs
  Both sides of the transaction will have closing costs. For buyers, most are related to the mortgage. For sellers, they’re related to real estate commission and title fees. However, the party paying these fees can be used as a negotiation tactic. In a seller’s market, for instance, it’s not uncommon for buyers to offer to pay the seller’s closing costs to make the offer more enticing to the sellers.
• Closing/Occupancy date
  The buyer will provide a closing date in their purchase agreement, but this (as well as occupancy after closing) can be used as a negotiating point for buyers in a seller’s market. A seller’s preference for a quick closing or more time to move (occupancy after closing) could be the difference between an offer accepted and rejected.
• Repairs
  Are there any repairs that need to be done to the home? Who’s going to pay for them? A pre-inspection isn’t a bad thing to have as a seller, but in a seller’s market, buyers might ask for fewer repairs than normal or add an “inspection floor” to their offer which would ensure sellers don’t have to make any repairs below a certain dollar amount.
• Miscellaneous
  These are items that are not normally going to stay with the property, from appliances to furniture to electronics. These normally excluded items are certainly negotiable so if you want to keep something in the home, you should get it in writing.

2. The Inspection Phase

Fast forward a bit: your offer’s been accepted and you’re cruising through the inspection phase. This is where things get real, folks. A professional inspector swoops in to uncover any hidden issues lurking beneath the surface. As a buyer, you’re armed with newfound knowledge about the property’s condition, and this is your chance to negotiate repairs or credits with the seller. Sellers, brace yourselves—this phase might mean a few extra negotiations to keep the deal on track. It’s all about finding solutions and keeping both parties happy.

3. The Appraisal

Last but not least, we’ve got the appraisal. This is the moment where an impartial third party steps in to determine the property’s “fair market value”. If the appraised value comes in lower than the agreed-upon purchase price, both buyers and sellers need to be prepared to pivot. Buyers might renegotiate the price or come up with additional funds, while sellers might need to adjust their expectations. It’s all about striking that delicate balance to keep the deal moving forward.

So, there you have it: the three points of negotiation in a real estate transaction, laid out in plain and simple terms.

Whether you’re a buyer searching for your dream home in Noblesville or a seller looking to make a move in Westfield, understanding these key points will set you up for success. Remember, communication is key, which is why it’s so important to have a trustworthy and experienced agent on your side to speak up and advocate for your needs.

Looking to move to Hamilton County, Indiana? Give Courtney a call or text at 317-379-7720.