How to negotiate the purchase price of a house

Setting a budget limit, being familiar with comparables in the neighborhood, and determining the condition of the property are a few of the tricks for negotiating

Because of the length of time and the amount of money involved, buying a home is one of the most important decisions we will take in our lives. Owning real estate gives us the peace of mind of knowing that the property is yours and that, at last, you are independent and have a place to call home without having to moving from time to time as a renter. Nevertheless, this purchase also involves a long-term financial commitment with a loan entity. For this reason, it's important to know how to negotiate the purchase price of a house and not just opt for the first figure that you're offered.

Negotiating the purchase price of a house is not an exact science and depends largely on the relationship established between the seller and buyer, as well as the personality of each one. The interest shown in the property as well as the haste to sell and buy will also play a crucial role. In spite of this “fortuitous” nature, you can consider a series of factors that, as a buyer, will help you to negotiate and close on a selling price that meets or is close to your original idea.

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Setting a budget limit

One of the biggest mistakes a buyer can make is not setting a budget limit. This maximum amount that you're prepared to pay has to correspond with your financial capacity and solvency. People often look for apartments with a price above their actual financial capacity. And although they agree to a price with the seller, the bank denies the loan that would allow them to meet the agreed-upon purchase price.

To avoid the frustration and disappointment of finding your dream home only to be denied the loan that allows you to make the purchase, you're much better off starting your search with a realistic budget. Remember that the concept of a “dream home” is more in our head that in reality. By performing an intelligent search, you're sure to find the ideal house that you'll be able to call home. According to experts, the price that you're prepared to pay should correspond to about 30% - 35% of your monthly budget, so that you're left with about 60% - 65% of your income to pay for the rest of your needs and unexpected expenses.

That said, it's better to calculate and set the budget limit at 35%, since, unlike a monthly rent payment, the monthly variable mortgage rate is subject to fluctuations in the Euribor and always has the potential to increase. If you accept a monthly payment that accounts for 40% of your monthly income, you'll be faced with difficulties regarding everyday expenses and unforeseen events. When you know your monetary limit, head to the bank so that it can approve your figures and guarantee you that it will grant you a mortgage loan when you find the house that you want to buy.

Do a study of the area and the housing conditions

Once you have decided on your maximum budget, the next step for properly negotiating the purchase price of a house is to assess the neighborhood and location of the house. This is fundamental to knowing the selling price of homes that are similar in size, layout and amenities, and in a specific location.

If you provide the seller with figures that objectively and verifiably demonstrate that the asking price is above that of other houses with similar characteristics, it will be much more likely that the seller lowers the price to reflect that discrepancy. To do this market study, you need to consider factors like the living conditions of the home or, more specifically, if it needs repairs before moving in. Additionally, you'll have to consider if the building has accessibility amenities like an elevator or ramps, services like trash collection, a garage or storage room, etc. When negotiating the purchase price of a house, even the direction the house faces can lead to considerable savings.

Study the seller

Although this may seem strange at first, this point is relevant. If you know the circumstances that led the owner to sell their house, you'll be able to establish a relationship and understanding that will tilt the price scale in your favor. Knowing how many additional offers the seller has received or how quickly the seller would like to sell the property are factors that will make negotiations for favorable for you.
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How does BBVA Valora help you to negotiate the purchase price of a house?

BBVA Valora is a web tool available on that helps you to discover how much the house you want could be worth. To estimate the sale price, BBVA Valora analyzes the land registry information relating to the apartment, together with details of similar properties for sale in the nearby area. The combination of information from publicly-accessible sources with specific algorithms is how we obtain the price estimate. Bear in mind, under no circumstances should this be interpreted as an official estimate (for this, you need a professional to perform an on-site analysis).

You can also get an idea of the neighborhood were the property is located. It does this by analyzing the evolution of the estimated sale price by square meter, the types of properties sold out in the area and the number of homes that are on the market. Lastly, you can use the tool to understand the impact of the purchase on your finances, thanks to the BBVA mortgage simulators and calculators.

If you would like to buy a house, go to and use BBVA Valora to learn more about the estimated value. This will help you to get the best sales price and the best mortgage conditions, with the various options offered by BBVA.

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