5 Tactics You Should Know and Use to Get the Best Deal on Your New Home
Your discussion with the new home salesperson is a two-way street. If you’re unprepared for the meeting, you’ll think that you’re in the midst of a congenial conversation while the salesperson is conducting a well-rehearsed sales process. To make sure you get the very best deal, you should approach your discussion the sales way. Think of every discussion you have with the salesperson as an exchange designed to get you the deal you want. While they’re trying to get a sale, you’re taking advantage of the situation to also “work the deal.” There are also some very helpful tactics you should put in your toolbox that you can use to tilt the balance of power and price in your favor.
1. Keep Interest High. Salespeople are just like the rest of us. They respond to positive signals. To keep the salesperson’s interest high and make sure you get the very best deal, make sure to do things that encourage them. The first thing you can do is answer in the affirmative when they ask you any of the soft closing questions. You can put off answering “yes” to the direct questions about buying, but you can certainly answer yes to the more innocuous ones. Affirmatively nodding and paying attention to the salesperson are also great ways to keep them engaged. Something else to do is using the names of your children or family members in your statements, such as, “Suzy would love this room!”, or “Our family would love this room!” These statements don’t obligate you, but they send a clear message to the salesperson that they should keep working on the deal. While the salesperson is doing their best to get you to visualize living in this home, you should be doing your best to get them to visualize selling it! What you really want when you’re working with a salesperson is their very best effort, and demonstrating you’re interested will certainly help.
2. The End of The Month. When I was a new home sales manager, there was high intensity on my sales team at the end of the month. We all had targets to hit, and as the end of the month drew near, we became very aware of the target- especially if there was a risk we’d fall short. Builders are no different than most companies. They have monthly goals. Salespeople are especially aware if they have not met their sales quotas, as are sales managers. If the sales in this community are below expectations, they may be willing to give you a little more to get this deal in before the month ends. If you know you’re going to make an offer on a particular home and waiting a few days or a week to get closer to the end of the month may get you a better deal.
3. Two Way Street. Salespeople are great at letting you know what they have done to make a deal happen, but they’re not really good at letting you know what you’ve done (or, more importantly, given up) to get something done. Keep a list of all the things you wanted, but will not be able to get in this home. These are items you’re giving up to get this deal done. Also, keep a list of how much you’re spending on the things you do want. This list is your responsibility and will come in handy further down the line when you’re negotiating the final price. If you’re going to do without some things that you really wanted, or are going to have to pay a bit more than you budgeted for this home, you should use those things as leverage to tilt the discussion in your favor. The builder isn’t the only one sacrificing to get this deal done; you are too. If you do not do this, all of your important sacrifices will have been done for nothing.
4. Real Estate Agent Bonuses. If you’re not going to use an agent to assist you in this deal, the home builder may be offering them an additional agent bonus over the traditional 3% commission, on this house. Candidly ask your agent if there is a “deal sweetener” for them on the deal and if so, what is it. These bonuses can be in the form of cash, trips, or a couple of extra points on their commission. There are many ways you can turn this to your advantage to get a better deal. First, just knowing this may indicate that the builder is in a real hurry to move this home and you may have a little more leverage on this home than on other ones. Second, you can tell your agent that you’ll split this additional cash with them. The agent can have their bonus in the form of the cash, and you’ll expect yours to come off the final price of the home. Some agents are very proactive about this and are willing to do it, and even advertise it, others may not feel that you’re entitled to this agent bonus. You should have an open and honest relationship with your agent, after all, they are being paid by you, not by the builder and any money the agent ultimately gets is coming out of the money you spend on the home. These few additional commission points can really add up. On a $350,000 house, a 3% commission will get the agent $10,500. If the builder is offering a 6% bonus instead of 3%, splitting the extra $10,500 with the agent could reduce your price on the home $5,250! This tactic is not to be used for the 3% bonus that the agent would normally get, but only for all additional bonuses that the builder is willing to give to an agent for selling the home. Ask about a bonus split early in the interview process you have with your agent to see if this is something they’ll readily do. If you do NOT have an agent working with you, ask the builder if there is an additional agent bonus on this home in the early stages of your negotiation and immediately remove it from the sales price of the home before you begin to talk price.
5. A Couple of Thousand Here and There. As you enter the final stage of your purchase, understand that most deals builders balk at are only a couple of thousand of dollars away from being accepted. When you’re at the end of negotiating the final price, you’re probably much closer to getting the deal than you may think. As a sales manager, a few thousand dollars would often determine if I would take the deal or not. As a buyer, you should end your first stage of negotiation with an offer to the builder that you think they probably won’t accept. Builders rarely flatly refuse an offer, rather, they will counter your offer with one of their own. Though your number and their’s may be far apart, in reality, you’re getting close. Keep this in mind, and if you need to toss in two or three thousand at the very end of the deal to get the home you want, you’ll be surprised a how often that last contribution gets it done. Having a little “reserve money” to throw into the deal after the builder counters your offer is the most important reason to underplay your budget at the beginning of your discussions. A few thousand additional dollars could be the “pot sweetener” that gets you the home. Using this money at the very end will definitely get you the most bang for these “late” bucks.
These are just a few of the ways you can use proven sales techniques in your favor to maintain balance in your negotiations with a salesperson and get you the deal you want on the home you love!