Negotiating the best possible price in a real estate purchase is the best method for gaining the elusive 'instant equity' in your property. 'Buying Right' is the key to starting off this major investment. What are some ways we can get a seller to take less than they might otherwise?
- NEGOTIATE from a position of power. Often, the art of negotiation in a real estate transaction diminishes to a game of back and forth counteroffers until you end up meeting in the middle. Instead, identify the actual value of the perfect property, and illustrate some ways that the target property falls short of that. These imperfections are the justification for an offer that is perceived as less than market value. In a tight, competitive market like we saw in 2015, this can be tricky, so be sure that you're willing to walk away.
- DISCOUNT - Allow a seller to discount the property for you. Sellers are often very proud of their properties. Leading with the 'lowball' offer may make the seller less apt to sell even at market value, much less beneath it. Allowing a seller to feel good about having you as the buyer gives them permission to lower the price a bit for you.
- KEEP IT CLEAN - Sellers are typically provided an estimate of their costs of sale when considering an offer on the property. Instead of coming in with your price and asking for concessions, home warranties, surveys, etc, be willing to cover those items on your own, and simply work that in to your price. Or consider putting one of these items in to your offer simply to be able to give it up in a negotiation, working towards your end goal of owning that property. Spending a little more upfront on your own costs pays off if you get the property for $5,000 less. Make the offer as easy as possible for the seller to say Yes to it.
- DO WHAT YOU SAY you are going to do. While this is a good guideline for life in general, live up to it in your offers on real estate. If you say "this is my final offer" be prepared for that, and be ready to walk away. Coming back after that point shifts the negotiating leverage to the seller. Walking away, and coming back later with your original offer just might get it done for you.
Often, your original offer is a set up. The seller may understand that. Be gracious, and reasonable, introduce yourself and your family, and you will separate yourself from the pack.