Once you have finished your price estimation for a selected home, you need to negotiate a price with the seller of the home. Now, you are going to make an offer, and this is the start of the negotiation. Some sellers set prices above the price that they will accept. During negotiation this slightly higher price creates a buffer margin for them. Because of the higher set prices of homes, most sellers are willing to accept less than their original asking price. Remember, your goal is to make sure that you do not pay more than you have to for the home.
First, you submit an offer in the form of a contract to buy the home for approval by the seller. Your real estate broker takes the copy of this prospective contract. He is the intermediary between you and the seller during the negotiation process. Second, the seller has choice to accept your offer, reject it, or suggest that you revise it. For example, if asking price for your chosen home is $70,000, and you offer $60,000, the seller may reject that offer but indicate willingness to accept a better offer of $68,000. Third, the decision reverts back to you to agree, to reject, or to revise the contract again. You may counter by offering $63,000.
The contract can go back and forth until the buyer and the seller either come to an agreement, or decide that it is no longer worthwhile to pursue the deal. Generally, the contract stipulates some other conditions like repairs to be completed by the seller and the date when the buyer will be able to take possession of the home.
Have you ever bought a home? How did negotiations go with your home purchase? Did you evaluate the property value or did you rely on your real estate agent?