It is rare, particularly when dealing with older houses in need of renovation, that a seller expects to receive the asking price of the house. It is up to you, the buyer, to pay as little as will possibly be accepted. Here are some suggestions for your negotiating strategy:
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Exercise the most extreme politeness, even if you don't trust those you are dealing with.
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Gently but firmly mention the flaws you have found and how much they are apt to cost you to fix.
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Let it be known that you are looking at other houses as well as this one.
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Make an offer twice as low as you expect to pay: the seller will surely not accept your offer, but will make a counter offer.
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Ask the owner to include certain repairs as part of the deal.
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Ask the owner to include in the deal certain items, such as
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Furniture
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Tools
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Appliances
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Restoration Materials
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Ask the owner to pay your closing costs or give you the time remaining on the insurance policy to reduce your start up costs.
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Explore the idea of the seller's giving you a second mortgage at a lower rate than the bank is giving you on the first mortgage; if the seller is planning on investing the profit from the sale, the interest you are willing to pay him or her may be more than bank or other investment interest will yield.
Watch out for sharpies who just want to make a lot of money on a house that is worth a little.
To get you through the legal technicalities, hire a real estate lawyer at an hourly rate. You may find you actually save legal costs incurred in broker-handled closings. Make sure your lawyer protects your interests adequately.
This Homebuyers Tip was excerpted from:
Reviving Old Houses by Alan Dan Orme, Garden Way Publishing, 1989.
ISBN# 0882665634
