19 Nov Negotiating on Property
We all know people who negotiate deals like they are competing in the final round of a boxing match, others who negotiate by making concessions at every turn. Thankfully there’s a middle ground that will get you further than either of the above approaches, especially when it comes to negotiating on property.
Effective negotiating involves adopting a flexible, objective approach that considers the other person’s needs and wants, as well as your own. Here are some tips on how to take a strong negotiating position when purchasing a property.
Put yourself in the seller’s shoes: this allows you to anticipate their reactions and plan your responses accordingly. See if you can find out why they are selling as this may help you determine the best incentives you can offer them.
Arm yourself with knowledge: you won’t know what a realistic price for the property is until you do your research. Find out the sales prices of similar properties in the area and how long the house has been on the market. You are in a good position to ask for a discount if the property requires renovation or repair, if other similar properties are selling for less, or if a valuation gives you different figures.
Listen and ask lots of questions: the best way to gather information is to ask lots of open-ended questions. Why are they asking this price? Who calculated the asking price? Why are they selling? When does the occupant have to move out?
Have your finance ready: this is a powerful demonstration of commitment to buy and gives you the option of offering a quick sale for a discounted price.
Use time to your advantage: never be hasty or impatient. Stringing out the negotiations may make the other party sweat a little and gives you the opportunity to find out as much as possible about the property.
Put it in writing: never agree to verbal contracts. Keeping everything in writing will make it easier to back up your negotiating position and prevent misunderstandings.
Keep a tight lip: never reveal your bottom line. Keeping your cards close to your chest ensures the estate agent cannot use this information to influence another potential buyer to increase their offer.
Give yourself room to move: when you make an offer try to remain flexible. Sellers often think they shouldn’t accept the first offer from a buyer.
Be willing to walk away: set a limit on what you’re prepared to pay and stick to it. It’s far better to walk away than over-commit to a property you’ve become emotionally attached to.