Real Estate Negotiation: Effective Tactics For Home Buyers

Written by Posted On Friday, 02 March 2018 05:57
Negotiating is a part of everyday life. In real estate, when you need to negotiate a deal to buy a home or a property, it is absolutely critical to your success. Negotiating for a home is important since this is the largest asset most people own and there’s potentially a lot of money at stake.
 
Remember to utilize these real estate negotiating tips when time comes that you find yourself pursuing future deals:
 
Be willing to walk away
Most negotiators have a price target or goal in mind before they even start. Before you bargain with a seller, you need to have a “max spend” in mind. This is the highest amount you are willing to spend on a particular home. The crucial step is being sufficiently trained to know where to take a stand. There are many negotiations that come down to wire and a couple of thousand dollars may secure you the property. The problem is that you have no idea where the bidding will end up. The minute you go over budget there may be no turning back. Even if you up your price and get the property, you will end up grossly overpaying and be compelled to compromise in other areas. Don’t get stuck in these situations.
 
Hey, it’s not personal!
Are you tired of working hard to make an offer on a property only to be outbid by someone else? When you spot a house you like, it isn’t strange that someone else likes it too. In negotiating, it is essential to consider the end-game. It’s a mistake to negotiate just for the sake of negotiating. Winning or losing a bid should never be taken personally. You must be prepared to lose sometimes and be willing to make difficult decisions. There will always be someone in your local area that you end up butting heads with during negotiations. You will not get every property that you have your eyes on. If you were outbid, don’t lose heart. Failure’s just part of the game.
 
Calculate risk and reward
Every place that you will put your money on can involve some type of risk. When negotiating on a property, balance the risks with the rewards. In many cases, the returns of the property may not be worth the loss. Instead of moving forward because you think you are committed, consider the return. If it is not a good opportunity or starts looking unsatisfactory, it’s your prerogative to walk away. The goal is not just to accumulate properties, it is to buy properties that impact your bottom line.
 
Be flexible
Negotiating requires knowing your bottom line or the limits you are willing to go to win an argument or closing a sale or purchase. For any negotiation to work successfully, both parties need to feel they are getting a good deal. Employing a no concession strategy can cause negotiation to become deadlocked. Whether you are dealing with a lender or a traditional seller, allow some flexibility. You have to be willing to make concessions to get concessions in return. Little trade offs such as small credit or a change in closing date could make all the difference. Try to find the motivation of the other party. Once you know their position, cater your stance on giving them what they want while still making the deal attractive for you.
 
The more prepared you are, the better
Knowing the past is a good predictor of the future. Every time you battle for a property, you should make notes on what worked and what didn’t. Some lenders may want to see their contract structured a certain way. Certain bidders at an auction have a style they use when they really want a property. Taking notes is a smart thing to do—what has not worked so you won’t commit the same mistake again. It is important to find out where the price ended up, and if there was anything that tipped the scales to the other party. Negotiation is often about who is the most prepared and who knows how to structure the deal best.
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Laffey RE

Laffey Real Estate is Long Island’s largest independently-owned family real estate company with 16 offices in Nassau, Suffolk & Queens Counties. Headquartered in Greenvale, New York, Laffey and its wholly-owned subsidiaries provide all of the tools and resources that buyers and sellers of residential real estate need to experience a smooth and timely closing.

www.laffey.com

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