Of course you know that negotiating for the price is a crucial aspect in the home buying process, right? It’s obvious you do! But the truth is, most property buyers assume that price negotiation is the only aspect in the whole process, which couldn’t be further from the truth. The price is just the first thing you negotiate for, as when the escrow is opened, that’s when the real deliberations start. After negotiating for the price, and have signed the purchase contract, the property buyer is supposed to negotiate for issues such as inspections, home warranty, repairs as well as the closing costs. This means that you need to be adequately prepared if you are planning to purchase a property, especially in Budapest, which is one of the main destinations for property investors in Europe.
First, you will need a property agent who understands the local market
When you consider all the things you need to negotiate when buying a property in Hungary, it literally pays to have an agent on your side – an agent who understands the property market in Budapest well. As a foreign investor, chances are that you don’t much about how the market is, so you will need to have someone who knows it better to guide you through the entire process. And by agent, we mean someone who is determined and is well-versed when it comes to negotiation strategies. Remember that you want to get the best possible deal, so you need an ace negotiator to help you with the negotiations.
The sellers may ask for more money than they expect to receive
If you take a look at property listings in Budapest – listing prices and selling prices – you will notice that the sold prices are mostly lower than the listed prices. The reason being, most property sellers are already highballing when listing their property, with an anticipation that the buyer will negotiate to try to get a deal. Property sellers, not only in Hungary, but all around the world always ask more than they expect to get, which means it’s totally ok for you to make an offer that’s below the listed price.
Prepare to get inside the seller’s mind
For you to get the best deal, you need to be a good communicator and negotiator. And for you to become one, you need to have a critical look at what the other side is saying and also decipher their self-interest or goals. For you to understand the seller, you need to understand why they are selling the property in the first place. It is by understanding the seller’s standpoint and motivation that you will be able to figure out a way to approach the negotiations. Try to find out if they are looking forward to retirement or are just relocating for work. With this kind of information, you will know better how to engage them in order to get what it is you really want.
Here is a list of the common negotiations
Price – this is the starting point, but it’s not the end. Once you’ve settled on the price, that’s when the bulk of your back and forth with the property seller begins.
Length of escrow – here, you need to be ready given that the seller may want a speedy escrow as they are on their way out. As a buyer though, you will benefit much more from a longer escrow as you will have the opportunity to ensure that any problems with the property are resolved.
Inspections – before buying a property in Budapest, ensure that a full inspection is carried out before you buy it. After all, it is a standard policy for an inspection to be done in all property sales in the country. The findings from that inspection will enable you and your agent to come up with a list of contingencies to include in your purchase contract.
Home warranty – the warranty can be paid for by the buyer or the seller. There are those sellers who choose to pay for the warranty as a way of preempting any responsibilities from them, in case there are problems with the property after closing the sale.
Closing costs – in a seller’s market, either party can pay for these costs. But, you, as the buyer, can offer to pay them so as to sweeten your offer.
Repairs – after the inspection, you may come up with a list of repairs needed on the property. Now, if there are repairs needed, you can do one of two things; you can either ask the seller to fix the problems or you can negotiate a lower price.
In summary, buying property in Budapest is not difficult and not easy either. But just make sure that you find all the help you can get if you are looking for the best deal.