Americans who are hoping to secure a home buying bargain might be wise to direct their attention to the US cities that have just been named the best for negotiating on home price.
The ultra low mortgage rates available from the best refinance mortgage companies in tandem with rapidly changing priorities as to what people are searching for in a home have seen house sales soar to highs not seen since the mid-00s in recent months. Now, in a further boost to potential homebuyers seeking to make their money go as far as it can, SmartAsset has revealed its latest rundown of the areas in America where you’re likely to prove most successful in talking down the price on a new home.
Specifically, 100 of the largest US metro areas were compared across two metrics: the percentage of listings with a price cut and the median price reduction. At a headline level, an average of 15.70% of home listings in those locations were found to have had their prices cut. And with the average reduction recorded across all locales at 2.40%, it definitely can’t hurt to chance your arm with an offer lower than the listing price.
Where it pays to negotiate on home price
If you’re intent on talking the price of a home down, it seems the Rust Belt is the only place to start your search. Indeed, all of the top 10 metro areas in the study are located in a region where a decline in manufacturing in previous decades has contributed to lower home prices. The net result is that many new home buyers have been investing in property in this region in recent years, with millennial buyers prevalent among those taking advantage of home prices that are more affordable than in coastal cities.
So where, in particular, are the best places for negotiating on home price?
1. Buffalo, NY
With an average price reduction of 3.93% between August 2019 and July 2020, homes for sale in Buffalo, New York saw the largest reductions of any location in the survey. More than 14% of the listings in Buffalo had a price cut too, making it the best bet overall for negotiating on home price, assuming you don’t mind the relatively cold winters that you'll find there.
2. Akron, OH
Akron is the first of four Ohio metro areas that rank within the top 10 and recorded the third-highest median price reduction of 3.55% in the year to July 2020. With 15.53% of listings in the area having a price cut, Akron offers further potential for bargain hunters here too.
3. Toledo, OH
Located on the shores of Lake Erie, Toledo is the second Ohio metro in the list, with prices being cut by an average of 3.40% in the last year. Some 16% of listings overall had their prices trimmed in that time.
4. Detroit, MI
Having been through several periods of decline and revitalization in the past few decades, Detroit, Michigan offers plenty of negotiating opportunities for buyers. The median price reduction over the past year is 2.97%, while 17.83% of properties have had their list price lowered.
5. Chicago, IL
With 20.76% of all listings having seen a price drop, the Windy City leads the way in terms of the number of sellers who are willing to negotiate. The median price reduction in the Chicago metro area is 2.30%.
6. Pittsburgh, PA
Pittsburgh, Pennsylvania has a high median price reduction of 3.30%, while just over 16% of homes in the area have seen their asking price cut in the last year.
7. Cincinnati, OH
Another Ohio metro area, Cincinnati, saw 18.04% of properties lower prices in the year to July 2020, and a median price reduction of 2.82%.
8. Rochester, NY
With the second-highest reduction in prices of 3.83%, Rochester, New York is a good choice for those looking for deep discounts. Additionally, more than 13% of the listings in the area saw their price cut.
9. Cleveland, OH
Cleveland is the final Ohio metro area in the top 10, ranking fifth overall for median price reduction, at 3.44%, and with 14.7% of property listings being reduced.
10. Indianapolis, IN
Indianapolis, Indiana features mainly because 20.07% of its listings saw a price cut in the year in question - the third-highest rate in the study. The median price reduction in the area was 2.26%.
Tips for negotiating on home price
Now you know where the top negotiating areas in the US are, the next step is to give yourself the best chance of haggling a house price down. As you might expect, a little preparation can go a long way to securing that bargain house price, although you might need to hold your nerve a little too.
Research the property thoroughly
Knowledge is most definitely power when it comes negotiating on home price, so find out all that you can about the property you’re hoping to buy. This means finding out how long the home has been on sale for and whether it has been marketed previously with a different agent. If it’s been on the market a long while, the sellers may be more open to a more audacious offer than you might think.
Also find out if the price has been reduced before - a good sign that the existing owners are serious about selling - and whether there have been any offers before, and what happened. Make sure you know the asking prices of similar homes in the vicinity too, just in case the home you’re looking at is slightly inflated in terms of value compared to its neighbors.
Take note of everything when viewing
When viewing the house, be sure to have your wits about you, and take note of anything that presents the opportunity to offer less than what the sellers are asking. If there’s mold on the walls, you’ve got the chance to tell the vendors you don’t have the time to research the best mold test kits, so maybe they should accept a slightly lower price.
Similarly, if the best carpet cleaners would struggle to make an impact on the floors, or there’s evidence of any pests, then use these as potential reasons to justify paying a lower price too. Check out everything, from floor to ceiling, and front to back, and remember all the things that might cost you money to put right should you end up buying.
Make yourself attractive as a buyer
The less hassle you seem likely to pose as a buyer, the greater the chance there is that a seller will bend to sell to you. Cash buyers and those free of a chain tend to get vendors most excited, but if you let it be known that you’ve got a mortgage agreement in principle lined up from the best mortgage lender, then it shows you’re almost ready to go too. Importantly, however, never let slip your real budget, as a vendor will always try to squeeze you ever closer to your limit if they know the money is there.
Suggest you’re interested in other properties
If you want to pile the pressure on a vendor, make them aware that their home isn’t the only show in town for you, and that there are other options you’re more than happy to explore. And if you think you’re the only one interested in this home, you hold even more of the cards here too, as the seller may just be willing to accept your lower offer rather than losing the sale completely.
Ask if other items may be included
Finally, if the seller is refusing to budge on price but you really want the property anyway, why not ask if certain items can be included in the sale. If you’re a first-time buyer especially, you might not already have, or be able to afford, all the furnishings that you need to make yourself completely at home. So if there’s a wardrobe that looks like it might be tricky for even the best truck rental for moving service to extricate, there’s no harm in asking if it might be left behind at no extra price.
If you’re successful in securing a new home, remember that you’ll need to arrange the best home owners insurance to make sure your new property and everything in it is protected from mishap or misdemeanor.