There is so much to unpack (pun intended) when it comes to negotiating the best price when buying a home in Richmond, CA. There are a lot of contributing factors to the home buying process that impact price, so let’s get started!
Hire the Best Real Estate Agent
The first step for any home buyer should be researching and partnering with a reputable real estate agent. Buying a home is complicated. Really complicated. In the following points we’ll discuss things that make it complicated, but having a Realtor® that has the knowledge, experience, insights on the market plus knows what you’re looking for and puts you first, that is the foundation of your entire real estate buying experience. You need someone who you can trust and knows how to negotiate the best deal on your behalf. Buying a home in Richmond, CA is competitive and you need a top professional to represent you well and has professional partnerships with lenders, home inspectors, title companies, and more for a smooth experience.
Meet with Your Lender BEFORE House Hunting
The second most important step is meeting with a great lender. If you don’t have one, your awesome real estate agent will direct you to one that they have experience with. This is important because you’ll be able to nail down your budget and increase your negotiating power when the time comes. If three people bid on a home and only one has secured financing, who do you think the seller will go with? Exactly. The one who has financing because it takes around 7-10 days to get pre-approved. That’s like dog years in the real estate world. In that time period, the buyer could back out, the seller could lose other offers, and potentially they could have a contingency on a new home that they’re buying that hinges on this home sale. There’s A LOT on the line here! Having the paperwork that says you’re prepared to buy automatically puts you near the front of the line for negotiations when you’re buying a home in Richmond, CA.
Buyers Market Or Sellers Market
Being in the San Francisco Bay Area real estate market pretty much means that we’re in a consistent Sellers Market. This means that demand exceeds supply. As our local population continually grows, the supply for houses hasn’t kept up with the demand. We also live in one of the most beautiful and diverse places in the world, so clearly demand also exceeds that of Nowhere, Indiana. As a home buyer, buying a home in Richmond, CA means that you may have some negotiating power, but don’t set your expectations too high. Now remember, it’s all relative! Let’s take a snapshot of Richmond’s market in February 2023. According to the California Association of Realtors, the average home is on the market for 21 days, 54% of buyers pay over list price, and 29% of sellers have reduced their prices. While those last two stats may seem contradictory, many times sellers reduce the price if the buyer interest seems low, then the buyer interest increases and the lower asking price gets its new full price or over asking. While there may be wiggle room, it usually is limited.
Working with a Home Inspector
Let’s say you fall in love with a home and you’ve made an offer on it. Don’t pop open the champagne yet. There are some important steps in the process that very well could make or break your deal. First your agent will arrange for a home inspection. This is extremely important when buying a home in Richmond, CA because a large portion of the homes in our city are older and may have hidden complications. Cracks in the foundation, a broken HVAC system, water damage, and more could be hiding just under the surface. An inspector won’t catch everything as they are only responsible for what is accessible and can easily be seen, but this is a good starting off point for negotiations. Will the roof need to be replaced? You may be able to ask for $10,000 below asking to cover that future cost. Does all the flooring need to be replaced? You might be able to talk the seller down $5,000. However, this all depends on the market. If there are multiple offers in a hot market, you may have to lower your expectations and compromise more. In a slow market, a seller could be more willing to make those fixes or give you a credit to help them make the sale and move forward with their planning.
Closing Costs and Interest Rates
The bottom line with negotiating when buying a home in Richmond, CA is that you want the lowest price with the best deal and the seller wants the best price to move on. A great agent will help you to meet in the middle. However, fluctuating interest rates have reduced buyer power and a decent down payment combined with closing costs can slow down a potential buyer. Closing costs range between three to six percent of your loan amount but you can ask for seller concessions beyond the price of the home to help cover closing costs or buy down the interest rate.
Clearly a lot goes into negotiating the best price when buying a home in Richmond, CA. As the market is constantly changing, discuss all of these options and topics with both your Realtor and your lender. New opportunities may come up (such as loans that offer a forgivable down payment), perhaps new build communities in your area may offer incentives to buy, or maybe you should wait a few months when the market is less competitive.
Looking for a great Realtor? Look no further than the Rick Fuller Team! Our Buyer Specialists are amazing negotiators that always put your best interests first. We closely study the market, have partnerships with great lenders, home inspectors, and other professionals and strive to give you an experience that you would be excited to tell a friend about. Questions? Give us a call today at (888) 950-RICK. We’re excited to serve you!
