Buyer, Beware: 5 Home-Buying Negotiation Tactics That Can Backfire

By Cathie Ericson | Jul 19, 2017

LordRunar/iStock; realtor.com

There's no denying that buying a home is a costly endeavor—in fact, it's likely the most expensive purchase you'll ever make.

So it makes sense to try to negotiate where you can. Save a few bucks here, get a few things thrown in there, right? We hear ya—we're all about making a smart offer that doesn't leave you house-poor.

But when it comes time to negotiate, there are a few strategies you should avoid, lest you risk offending the seller and losing your shot at your dream home. This is especially true in a red-hot seller's market, where the seller might have a number of tempting offers and is looking for anything that breaks the tie.

1. Making a lowball offer

How low can you go? That seems to be the game some buyers play, assuming that if they start really low, they’ll end up getting the house for a song.

Gary Lucido, president of Chicago-area firm Lucid Realty, says that buyer’s agents commonly dissuade their clients from this tactic because they fear it will “insult” the seller. But the problem might be bigger than just hurting someone’s feelings.

“The real issue in starting well below the market value is that it costs you credibility,” he says. “The seller either thinks you don’t know the market or you are looking to take advantage of someone, and in either case, they don’t want to deal with you.”

The bottom line: The seller has a number in mind, and whether you start at $1 or $300,000, it only matters if you can hit the seller’s lowest target selling price.

“You’re not going to lower their target by starting at a lower number,” Lucido says.

2. Asking for a bunch of add-ons

You’ve found a place that's within your budget. What's more, you've fallen in love with the home—and everything in it.

You might be feeling emboldened to ask for more than just the house, but you should resist that temptation, says Ameer. She’s seen buyers who think it’s a good idea to ask for furniture or appliances to be thrown in for free, or expect that the sellers will just leave their patio furniture because it “goes so well” with the house.

Apparently the adage “it doesn't hurt to ask” doesn’t apply in this situation.

“Sellers become totally offended when you keep asking for more, and you risk alienating them,” Ameer says. “Even if they don’t like their patio furniture anymore, they’d typically rather sell it on Craigslist than leave it for a greedy buyer.”

Of course, you can always ask to buy their stuff—in that case, they'd probably be flattered!

3. Using the inspection as a renegotiation tool

So, your offer was accepted, but then you start to get cold feet and you subconsciously (or consciously!) start searching for flaws that you could use as leverage to lower the price.

“Most inspectors are going to find something to recommend—such as adding gutters, improving the drainage, or upgrading all the smoke detectors—but those aren’t repairs that the seller is responsible for,” Ameer says.

If the inspection turns up something major (like a cracked foundation), by all means that should be discussed. But you shouldn’t demand that the sellers fix every minor thing or lower their price.

“You can’t expect a perfect house,” Ameer says. “If you’re constantly nickel-and-diming the seller, they might decide you’re not someone they want to do business with.”

Mind you, the sellers generally can't just back out because they're unhappy, but if both parties are unable to come to an agreement regarding repairs, they can both decide to abandon the deal.

Remember how much you have already invested in the process, in terms of time and money, and be willing to let the little things go.

4. Negotiating with incremental amounts

Nobody wants to pay more than they have to for a home—why offer $350,000 when you could have it for $325,000? But if you engage in too much back-and-forth, you'll risk alienating the seller. When buyers insist on making incremental counteroffers, they're just giving sellers a chance to move on to the next buyer, says George Theodore, a senior real estate adviser in Miami.

So, for example, if you’re ultimately willing to go up $8,000, don’t make four additional offers of $2,000 each.

“This tactic just tires out both sides and prolongs the transaction since you usually give each party 48 hours to reply," Theodore says. It "actually gets you nowhere tactically or psychologically.”

5. Making a 'one-way offer'

Just as the seller has a target price in mind, you probably have a point at which you'll be unwilling to budge. But one of the worst things you can do is advertise this to the seller.

Ameer calls this the "one-way offer," where buyers dig in their heels and state right off the bat, "This is our offer, you have X amount of time to respond, and if you don't take it, we're moving on."

"This just puts the seller on the defensive and usually is a path to a dead-end offer," Ameer says.

It seems like an obvious no-no, right? Well, even in this red-hot seller's market, Ameer has seen buyers push for this tactic despite her warnings—especially if the buyer is offering all cash, or if the property has been on the market for a while. She calls it the "seller-is-lucky-to-have-me syndrome."

"Sometimes buyers have to try this tactic themselves to see how it really ends up before they decide to get with reality," Ameer says.