Before we start, let us keep in mind- “Negotiation is a is never a one-way street”. It is a part of any deal that can assist in making the process less of a hassle, especially in the daunting task of purchasing a property. However, the process of negotiating can be a slow process at times while at other times things can sort out in a jiffy. So, it is advisable for home buyers to maintain patience when going about a property purchase.
In case of a property deal, like in any other situation, it must be kept in mind that at the end, each party has to be profitable. This simply means that the parties involved in the sale of the property need to feel that they have been able to gain something out of it.
Negotiation starts right from the moment that we make the first contact with the seller or an agent. This form an impression of us in their minds as well as reflects how, as buyers, we would behave in the future. Hence, making the first impression is crucial.
So, here are 5 negotiations secrets that will help you in the purchase of the property of your dreams.
THE 5 NEGOTIATION SECRETS
#1 Walk-away price
When buying a property, remember that the first rule is to never let your seller or seller’s agent know about your final walk-away price. The reason being that they will attempt to get as close as possible to your walk-away price, squeezing every last cent out of you.
As a buyer you could end up negotiating a property for a price higher than it’s worth. If you ever are pushed to advise your budget then the best action would be to advise the seller or agent that you have adequate finance but are looking to buy a property at market value.
It is advisable to only mention a market-price range or to indicate a price that is lower than what you are capable of spending.
#2 Get a hold of your emotions
Buying a new home is undoubtedly an overwhelming experience. However, don’t let your the seller see or know that. There is every chance that you are in love with a property, but your desperation could result in your downfall. Sellers and agents can sense a buyer’s desperation from a distance and they will not hold back their attempt to tempt you.
To tempt an interested buyer, sellers will use tactics like other buyers who are showing more interest or a lack of time. Hence, lock up your emotions and maintain a balanced and composed attitude by pointing out factors that might impact the value of the property. A building inspection or pest report, as well as a copy of the contract, can be beneficial in this regard.
#3 Know the market
In order to be able to negotiate effectively, a home buyer needs to have adequate knowledge about a property and the area. Miscalculating the value of a property can make us seem like an uninterested or flippant buyer.
Hence, we need to take our time, researching and going to inspections so that we can get a good picture of the property market in our area before making a final offer. What we are willing to pay for a property is only part of the entire deal.
#4 Deal wisely with a developer/ builder
Generally, it is the builder/developer who makes the decisions about how they would sell a home in their community, and it is up to us to either take it or leave it. The price that we pay is the list price, however in many markets, developers and builders are willing to negotiate especially if they have a large amount of inventory.
A builder usually has a standard contract with a standard required deposit, a standard contingency removal or objection periods, and a standard set of disclosures that they make to every buyer. The more renowned a builder is, the more set they will be in their ways and to their price. Hence, it would not harm to ask for concessions or upgrades. Moreover, builders avoid getting sued, which is why they generally try creating a standard contract equivalent to what our real estate agent would create for us.
#5 Cut in the middle man
During a property purchase, if and when you need to speak to a seller, always do so via your real estate agent. They will will communicate any of your requests or concerns to the seller’s agent. The reason being that it is a novice move to try and speak directly to the seller’s agent, especially with the tough and legally sensitive real estate terminology.
Additionally, there might be small changes to the agreement with the seller which might create problems with our lender. Hence, our real estate agent is better equipped than us to notice the red flags involved in the deal.
OVER TO YOU
Negotiations for a property deal does not have any hard and fast rules. However, these 5 tips will lead you to successful price negotiation. Strong negotiating skills will help us in securing a property at a much lower price. This will not only save us money but future interest payments as well.
Discovering certain facts will make you more knowledgeable about a property and vendor’s circumstances. This will provide an opportunity to negotiate a lower price. Hence, to receive a lower price, we require to offer something to the vendor in return.
One of the best methods to become a favorable prospective home buyer, is offering a quick settlement. In order for this to be most effective, we need to ensure that all our finances are ready and in place before we start the negotiations. Keep all of these points in mind and we will be on our way to winning a great deal.