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If you have found a property that you wish to purchase, do not let it slip through your fingers. Plenty of inexperienced real estate investors find themselves losing deals that could have been theirs because they did not know how to reach out and grasp it.
Never assume that simply because you have made it into negotiations with a seller that the property is as good as yours. While you may be in a strong position after securing your seat at the table, negotiating real estate is where deals live or die.
While you are negotiating real estate transactions, there are three primary factors that need to be agreed upon. Those are asking price, terms and conditions and the final purchase price. If any of these factors do not satisfy all parties, the deal is as good as over. This means you need to be careful when trying to turn the deal towards your favour.
So, to help you maintain your negotiating power during your next real estate deal, here are five tips you should consider.
But first, before you even think about negotiating real estate deals, click the link below to book a free strategy call to start planning your financing. That way when it is time to start negotiating real estate prices and more, you are fully prepared.
Understand the Seller’s Wants While Negotiating Real Estate
Every seller has their own reasons for letting go of a property. Whether it is a homeowner looking to move into a house better suited for them, an investor looking to cash out on a property they’ve been holding or an individual looking to sell their home in order to pay off their debts and avoid bankruptcy.
If you can discover why the property is available for you to purchase in the first place, you will have a stronger idea of how to structure your offer to best stand out and get you accepted.
Of course, many buyers are not going to be up front with you about their reasons for selling a property. This means you will need to use a keen eye when viewing the property. For example, if a property is for sale and is currently tenanted, you can assume that an investor is looking to shed one of their investment properties and you may not have too much room to cut down on the price.
Alternatively, if you see a property with overgrown grass and faded paint you can assume that the seller has not been able to keep up with the maintenance and you can potentially talk them down to a lower price in exchange for you doing the work yourself.
Be Direct About Your Plans
If you are looking to buy a property, be open and honest about your plans for it. If you are buying a house because it is in a good neighbourhood and could make an excellent new principal residence just say so. If you are buying a house with the intent to rehabilitate the property and bring the value up, go ahead and state your plans.
By being honest about your goals for a property, you give the seller a clearer picture of who you are and the reasons you are making an offer. Homeowners are often sentimental, and they would like to know what is planned for their home even after they have moved on. The peace of mind that comes with understanding what will happen next with a house can quickly become a strong negotiating factor.
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Understand the Property You Are Buying
If you are negotiating real estate, you need to know exactly what you are dealing with. This means having a firm understanding of the property you are about to buy. If you do not take the time to properly view a property and inquire about recent renovations and maintenance, you are wasting your opportunity to properly prepare and gain the advantage or understand your limits during negotiations.
If a property is in disrepair and in obvious need of repairs after purchase, you may have the ability to talk down the price of the property. However, if the property has undergone recent renovations, odds are you are not going to have too much room to play and instead will need to shift gears and consider your conditions to sweeten the deal.
You will also want to have a clear picture of the prices that comparable properties are selling at in the area. This way you can quickly identify an overpriced property that you can talk down, or an underpriced property you want to buy quickly before the price increases.
Know When to Walk Away From Negotiating Real Estate Deals
Sometimes, you have to walk away from a deal. Regardless of whether you are a master at negotiating real estate or a rookie investor dipping their toes into the market, some deals just do not pan out and you should not waste your time fighting for a property that is long gone.
Even if you could negotiate a better price or conditions on a property, sometimes it is simply not worth your time and effort. After all, while you are doing your research into a property, you may find problems that would be too expensive to make the purchase viable for you and your investment needs.
Regardless of the reason, never be afraid to walk away from a deal that is not working out. By knowing when to walk you can save both your own and the sellers time and carry on to a deal best suited for you.
Using Pre-Approvals to Look Like a Serious Buyer While Negotiating Real Estate
If you want to look like a serious buyer while negotiating real estate and with the most confidence about what you can afford to buy, consider getting a pre-approval. With a pre-approval from an experienced lender, you will have a clear picture of exactly how much you can afford to offer on a property and can structure your offer accordingly. If you know you want a property and do not want to risk someone else getting it, you have the option to bid your maximum approval amount right away.
Understanding your budget makes you look prepared and professional to both the seller and your realtor. So, if you are ready to be professional and buy real estate like a pro, contact us at LendCity. Our team will gladly take your application to our network of lenders to get you pre-approved at the best rate available to you.