How to Negotiate a Great deal on Real Estate when you see one
1. Buy Without Emotion. Buying at Auction is more competitive today than it has been in the past. More savvy Investors are looking for hot property that is undervalued.
2. Do your Homework- Due Diligence will pay off. Look at similar properties in the same area that have recently sold. Sometimes it pays off to get a valuation based on its location, existing condition, accommodation, style and land size
3. Assess the Sellers Situation- Not everything is negotiable. Good negotiators will track down vendors that need to sell and are motivated to sell. Discovering why the vendor is selling provides real insight into whether the property is worth bargaining for.
4. Establishing an offer is a fine balance. Go to low and you will scare the vendor away. If you have done your research you should be able to offer a fair market price. Your first offer should not be your last. You may be able to buy the property at a lower value. Negotiating is like playing a game of cards. Don’t play your best cards too early. If you save some money you can leverage that money to invest or buy more property.
5. Organise Finance approvals, building reports and contact approvals first. Have another property up your sleeve so you can use it as leverage in your negotiations. Find out if there are other offers on the table and the terms they are on. Present your offer in writing on a contract as this will show you mean business and attach a deposit cheque of 10% of your price.
6. If the deal has not been closed then doing nothing is sometimes the best strategy. Sitting back and waiting may make the vendor nervous and become more negotiable if they think that you are going to walk away. Time can be great negotiating tools so let the agent chase you. If it is an emotional buy for you dream home then time out can also be beneficial. When negotiating the price end on an uneven number as this will imply that you are pushed to the limit on your price.
7. How to negotiate Counter offers. If a counter offer is made try and find out how many other offers have been made verbally or in writing. Find out how many requests for building reports and repeat inspections and this will allow you to gauge the interest level from other buyers. Negotiate counter offers by giving something more back to the vendor. Offer a win- win situation. By improving the terms of your offer the vendor will know that you are serious.
Just remember that every deal may not be salvageable but also remember that there is a time to walk away and another property will become available.
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