Four Areas To Negotiate When Home Shopping

A couple negotiates over the price of a home | Image by Gorodenkoff/Shutterstock

Housing market volatility has driven some would-be homeowners to try haggling over certain upfront property expenses.

Homebuyers typically lack the leverage to negotiate a seller’s asking price, but financial advisors point to four other relevant areas that may be more effective to haggle over — mortgage rates, common fees, move-in costs, and maintenance costs, reported The Wall Street Journal.

Regarding mortgage rates, a Zillow Group Inc. housing survey found that 72% of homebuyers decline to shop around or negotiate for a better rate, ultimately costing them an average reduction of 10 basis points, according to a recent report from Freddie Mac.

“You don’t get a discount if you don’t ask,” said Ted Rossman, a consumer-spending analyst at Bankrate.

When it comes to mortgage rates, the difference between 6% and 7% over a 30-year period can add up, so all relevant discounts matter, he said, per the WSJ.

Another area where buyers can find discounts is with the common fees related to buying a home.

Aniva Hinduja, Credit Karma’s general manager of home and mortgage, suggests that potential homebuyers should try to negotiate with their lenders on potential reductions in the origination fees, loan application fees, and underwriting.

“It’s on you to advocate for what you want — your lender isn’t likely to offer to waive any fees proactively,” said Hinduja, the WSJ reported.

Shane Sideris, a California-based financial adviser, offers the same advice to her clients, noting how competition among lenders regularly drives certain fees to get waived.

By exploring different bargaining options with mortgage lenders, moving services, and utility companies, prospective buyers can often walk away with significant cost savings, according to New York homeowners Kalli and Francesco Vetrano.

“It really goes to show that taking the time to make a few phone calls and ask questions can save you in the long run,” Kalli Vetrano said, noting how she and her husband saved between $20 to $30 a month on heating expenses by just shopping around, the WSJ reported.

With record-high inflation, rising interest rates, and decelerating home prices bringing an end to the post-pandemic housing boom, some moving companies may be more willing to negotiate on discounts, according to Emily Irwin, senior director of advice at Wells Fargo & Co.

Irwin recommends getting quotes from at least three moving companies and negotiating first with the price — typically a flat fee or an hourly rate — and next with fringe benefits like packing and unpacking, furniture assembly, and replacement value insurance coverage, per the WSJ.

The last area financial advisors suggest offers potential for cost savings is in the various services related to upkeep costs, for which Cheryl Costa, a Massachusetts-based financial planner, recommends finding innovative ways to trim expenses like landscaping and repairs.

Costa received a discount, for example, by allowing her landscaper to put a sign up in her yard for one week in the fall and spring each year advertising his services.

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