What makes a home deal a good one?
THE HOME GUIDE · 28
What actually makes a home deal a good one?
Buying below asking or selling above asking can feel like a win. But those numbers rarely tell the whole story.
ABOUT 8 MINUTES TO READ
CONSIDER THIS EXAMPLE
Original asking price
$900,000
Agreed purchase price
$850,000
But what if comparable homes are selling for $810,000 to $830,000?
The seller chooses the asking price. That makes it a poor measuring stick for deciding whether a buyer got a bargain.
The same is true when a seller receives more than asking. A property deliberately listed below market value may attract offers well above that number.
A genuinely good deal comes from understanding the property, the alternatives available and the terms of the agreement.
It also depends on something people often overlook: what each side needs the transaction to accomplish.
01 / KNOW THE MARKET
A good negotiation begins before anyone makes an offer.
Before negotiating, you need to understand the property's position in its market.
That means studying recent sales of comparable homes. It also means looking at homes still for sale and listings that ended without selling.
Together, these tell you more about the choices available to buyers and the competition facing sellers.
Four things worth investigating
Comparable sales: What have buyers actually paid for similar properties?
Active listings: What other homes can a buyer choose today?
Expired or terminated listings: Which homes failed to sell, and what might explain that?
Listing history: Has the asking price changed? How long has the property been available?
A property sitting on the market for several months may present an opportunity. But the time alone doesn't establish that the home is overpriced.
You need to find out whether the asking price, condition, presentation or other circumstances explain why it has not sold.
02 / UNDERSTAND YOUR LEVERAGE
The market can tell you who has more choices.
Two useful measurements are the sales-to-new-listings ratio and months of inventory.
This compares the number of homes sold with the number of new listings over the same period. It helps show the balance between sales and new supply.
This estimates how long the current supply of listings would take to sell at the recent sales pace, assuming supply and demand stayed unchanged.
When supply is high compared with sales, buyers may have more options. When suitable homes are scarce and selling quickly, sellers may have more leverage.
These indicators are most useful when measured for the neighbourhood, price range and property type that matter to your transaction.
03 / A REAL TRANSACTION
How market knowledge created an opening for a buyer
In one purchase I worked on, a property had already been reduced in price and had remained on the market for some time.
We studied the local market. The sales-to-new-listings ratio was low, and there was a relatively large supply of available properties.
Those conditions suggested that buyers had more choice than they would in a highly competitive market.
My clients were interested in the property, but we needed to establish what the home was worth to them and how far the sellers might be prepared to negotiate.
We approached the negotiation with evidence, a clear strategy and an understanding of how the conversation was developing.
WHAT HAPPENED?
Through a series of offers and counteroffers, the buyers secured the property for less than 90% of its already reduced asking price.
The result came from combining market information with a responsive negotiation strategy.
But the important lesson isn't the percentage discount.
A discount only matters when the final price makes sense relative to comparable properties, the condition of the home and the buyer's objectives.
The negotiation worked because the strategy was specific to that property and the circumstances surrounding its sale.
04 / KNOW WHAT MATTERS TO THE OTHER SIDE
The best bargaining chip may have nothing to do with price.
Every buyer and seller brings different priorities into a transaction.
One seller may need a specific closing date. Another may care most about having confidence that the sale will close.
A buyer may need time to arrange financing or complete a home inspection.
Those priorities can create ways to negotiate beyond simply moving the price up or down.
Think about these possible trades
Price for timing: A buyer may be willing to offer a stronger price in exchange for a closing date that works better for them.
Price for included items: The parties might negotiate appliances or other fixtures as part of the overall package.
Flexibility for certainty: A seller may consider a different price when the proposed terms address an important concern.
Repairs for price: The parties may discuss a repair, an agreed adjustment or another documented solution after an issue is discovered.
The key is to understand what each term is worth to the people involved.
A concession is more useful when it helps create an agreement that works for both sides. Material changes should be properly documented, with legal advice when appropriate.
05 / ANOTHER REAL TRANSACTION
Why a seller's strategy had to change
In another transaction, we listed a home with a deliberate pricing strategy and set a date for offers.
An early offer arrived, but showing activity appeared strong. We decided to continue with the planned offer date.
Then something unexpected happened.
Some interested buyers wanted to sell their own homes before committing to another purchase.
Rather than remain committed to the original plan, we adjusted.
We contacted the buyer who had made the early offer and negotiated an agreement.
The agreement included conditions and a carefully drafted provision addressing what could happen if another interested buyer emerged.
When another offer arrived, that provision became relevant. The original buyer fulfilled the outstanding conditions, and the deal became firm earlier than originally expected.
The strategy changed when the evidence changed. We found a way to move the transaction forward while managing the seller's uncertainty.
Contract provisions of this kind require careful drafting and review. The example illustrates a negotiation approach, rather than a clause that should be used in every transaction.
The lesson is that a good plan needs room to adapt when circumstances change.
06 / THE HUMAN SIDE
Good negotiators pay attention to people.
Market statistics provide useful information. But people make the decisions.
A seller may be anxious about whether a buyer can complete the purchase. A buyer may be worried about repairs or about committing to a home they haven't fully investigated.
Understanding those concerns can help shape a more effective discussion.
"What matters most to your client beyond the price?"
"Is there a particular term that's making this difficult?"
"What would help make the agreement workable?"
The answers may reveal options that weren't obvious at the beginning.
Strong negotiation involves knowing when to make an offer, when to ask another question and when to stop negotiating.
07 / TEST YOUR JUDGMENT
Which offer is actually better?
Imagine you're selling your home. Two buyers have submitted offers.
OFFER A
$820,000
Financing condition
Closing date that creates difficulties for the seller
OFFER B
$810,000
Financing arrangements reviewed in advance, with fewer outstanding issues
Closing date that fits the seller's plans
Tap to explore which offer may be better
Offer A provides $10,000 more, assuming both transactions close as agreed. Offer B may offer practical advantages that are valuable to the seller.
The seller needs to understand the actual conditions, risks and costs before deciding. Preliminary financing arrangements do not guarantee a completed mortgage.
The best offer depends on the seller's priorities and the evidence supporting each buyer's ability to complete the transaction.
08 / THE DECISION FRAMEWORK
Five questions to ask before calling a deal good
1. What is the property actually worth?
Compare recent sales, property condition and current alternatives.
2. What happens if this deal doesn't work?
Understand your other choices and how comfortable you are with them.
3. What does the other side need?
Look for useful information about timing, certainty and contractual priorities.
4. What risks are you accepting?
Review financing, inspections, conditions, closing arrangements and other obligations.
5. Does the outcome meet your real goal?
The decision should make sense beyond the immediate excitement of reaching an agreement.
A good deal is measured by the result, not the headline.
A deep discount might be worthwhile. A full-price offer might also make sense when the evidence supports it.
The strongest decisions account for the local market, the property's condition and the practical terms of the agreement.
Preparation helps you recognize the opportunity. Sound judgment helps you decide whether to take it.
Categories
Recent Posts
