5 Real Estate Negotiation Tips to Help You Get the Advantage
Imagine this, you are pacing the room, checking your phone every 30 seconds waiting to hear the words every real estate investor looks forward to hearing, “Your offer has been accepted.”
The excitement of an accepted offer is an incredible moment, but the real thrill comes while you are still in real estate negotiations, trying to secure the best deal available over other investors moving in on the same property you are. So, the question is, how can you secure an advantage and become more aware of your advantage over other investors beyond offering to pay more money.
However, before we dive into real estate negotiations, if you want to put your best foot forward and be prepared to negotiate, click the link below to book a free strategy call to start arranging your financing options today.
Connect With the Seller
Investors do not often get to know the people they are buying from – they are not asking who the seller hopes the home will go to. This sets you as the investor at a disadvantage, because in many cases, sellers care more about who is buying the house than the amount of money being offered. Take the time to try to connect with the seller and find out how you can convince them you are the buyer they want to sell to during real estate negotiations.
For example, a property owner looking to sell a home with a large yard, pool and in-ground play structure is highly likely to look for a family to take the property, especially if they were involved in the installations. People want to see their hard work go to good use after they leave. By talking to the owner, you can assure them you understand their wishes for the property and will find a good family to rent the unit too.
If you are not able to speak face-to-face with the seller to form that connection, try sending a letter alongside your offer explaining who you are and your hopes for the property you are purchasing. Highlighting yourself as a person is going to inspire much more confidence in the seller than a corporate name and logo because it makes you feel human.
Find Out Why They Are Selling
Every seller has a reason to sell their property, it is your job to find out what that reason is and use it during real estate negotiations. Ask your realtor questions about the property before and after you view it so you can have a better understanding of why the property was listed. Using this information, you can adjust your offer to the property owner in a way that makes you a more suitable buyer.
Look around for different things that may indicate why the home is for sale. Are there multiple beds in a single room? Is the home full of boxes? Are there any noticeable issues with the property? Any of these things could tell you why the owner decided to sell. Boxes may indicate the owner has already found a new home and wants to sell their old one quickly, while visible flaws in the property may suggest the property was too much work or money for the seller to maintain and you might be able to negotiate a lower price.
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Give The Seller What They Want
Potential buyers often blow entire deals by making poor offers that leave the seller feeling like they almost got ripped off. Heavy low-balling, excessive conditions and demanding attitudes are all signs of inexperienced or poor negotiators who are just trying to make a fast dollar and most sellers will not bite. Instead, aim to negotiate a deal that benefits both parties. After all, a real estate negotiation is a conversation, there is going to be give and take.
Perhaps the home has furniture that looks very heavy and difficult to remove. By offering to move it out yourself or buy it off the property owner, you are making the deal better for everyone – while others may try to force the seller to include it with the home for free or set restrictive dates for it to be removed.
If a home has visible damage, some people may demand it to be repaired at the full expense of the previous owner prior to buying. So, you can offer to either buy the home as-is at a lower price and cover the repairs yourself or contribute to the cost of the repairs. This makes the seller feel like they are getting a better deal from you, without simply offering higher prices and wearing down your own funds.
Know When to Walk Away From a Real Estate Negotiation
Every good gambler knows when to fold, and every good investor knows when to walk away from a real estate negotiation.
A home may seem perfect, but at the end of the day if the price is not right and the seller is not budging, you do not want to overpay for a property. In times like these, the best strategy is to move on and find a different place to invest in. Allowing yourself to become overwhelmed and stressed over a single deal and draw out the a real estate negotiation that is not panning out is never worth the time and walking away is always a viable option.
It can be hard to walk away, especially after long real estate negotiations with a seller. You feel as if you’ve sunken so much time into the property already and you do not want to walk away empty handed, but there is always another deal out there.
Sometimes, after walking away from a deal the seller may even call you back and try to resume real estate negotiations, leaving you in a much better place with a lot more power. Or, in the time you spent trying to secure the first deal, a new property has come onto the market which suits your needs better than the first.
Get a Pre-Approval
Of course, before any good real estate negotiation comes a pre-approval. Getting pre-approved for your mortgage before shopping for properties is an excellent way to determine exactly how much you can afford. If you get pre-approved for $500,000 and a property, you are making an offer on has reached bids beyond your means, you know it is time to walk away. However, if offers are coming in below your approval, you know exactly how much room you have to offer and outbid other buyers.
To start the process of getting pre-approved today, visit LendCity.ca and let us help you get ready for your next real estate negotiation. Alternatively, click the link below for a free strategy call today.