There are many important negotiation tactics buyers can use to get the best deal on a foreclosed home. Like shopping at a swap meet, it’s possible to lower the price to the homebuyer’s advantage. Here are the four “D’s” to negotiating strategies to finagle the best price out of a foreclosed home purchase.

Double check the price: Before you buy a foreclosed home check the prices in the neighborhood. Many homebuyers and investors make the mistake of thinking they’re getting a steal of a deal only to find out months later that they paid the highest price possible. According to www.buyinghome.org, buyers should not pay more than the median price paid in the last six months and should stay at least 20 percent below the median price.

Do some super sleuthing: Every foreclosed house has a story, and as a homebuyer, it’s important for you to know that story before you purchase a foreclosed home. Find out from the owner, neighbors, or real estate agent why the home is for sale. If the previous owner was not able to afford the upkeep and repair, then that fixer upper property can give you some negotiating leverage with the lender if you’re willing to pay for repairs.

Days gone by: One of the best negotiating tools a foreclosed homebuyer can use with the seller is knowing how long the property has been on the market. The acronym “DOM” means days on the market and many real estate reports will reflect this. Often if a foreclosed property has been on the market awhile, buyers have more leniency in negotiating a lower price, because the seller will be anxious to get the home off the market.

Don’t doubt the offers: Another important negotiating tactic is finding out how many offers have been made on the foreclosed property. If there have been other offers that have fallen through, find out why. Did the previous financing stall? Was there something scary in the home inspection report? The more you know about what has happened in the past, the more likely you’ll have ammo to bargain battle with in the future.

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This is filed under Foreclosures.


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