7 Tips When Negotiating To Purchase Property
Every property deal is negotiable.
What I mean is, like most things, there’s a level of influence you can have on the outcome – and real estate is no different. However, the process of property negotiation is not always simple.
Buying a house or an apartment is a serious decision which comes with a lot of emotions that can get in the way of logical reasoning. How many times have you heard of that person who bid out of the price range because they’d come so far and didn’t want to lose in the heat of the moment?
My point is, if you want to leverage the most of your negotiating power when buying property, it’s important to consider all of the following tips from my experience as a Buyers’ Agent.
Keeping emotion under control
So, let’s start by removing that emotional element from the process. I know this is hard, given that buying a home is part of either your investment strategy or a big life goal. But the negotiation process can’t be emotionally charged as it involves thousands of hard-earned dollars and time, it’s an investment that both you and the Seller want to make the most off.
Once you’ve accepted that negotiations are not personal and it’s more of a logical exchange, it’s much easier to maintain control.
Consider the second party: the Seller
The negotiation always has two sides – you and the Seller on the other end. To arrive at a great deal, both side’s interests must be considered. So, before making a proposal, take the time to understand the Seller’s circumstances.
What are they like? What does this property mean to them? Why are they selling?
Knowing the Seller’s motives is a crucial part of the negotiation process. Whether the sale is financially driven following the event of a divorce, bankruptcy or a deceased estate, the sale is motivated by a traumatic event such as a recent death in the family, or the Seller is just thinking of upgrading or downsizing, these factors all need to be considered as they affect the Seller’s decisions.
Taking note of these scenarios will allow you to make more informed decisions around your approach.
Aiming for a win-win situation
You may have heard of the saying “you can’t have your cake and eat it, too.” This principle often applies to negotiation scenarios. Of course, you can’t just give in to the Seller’s desires to close the sale. But you also can’t expect them to do the same for you, either.
So, the goal is to have a win-win situation. I’m not just talking about the price. Remember, there is more to a property Contract than just the purchase price. For example, I’ve seen negotiations where the Seller has pushed for a higher price, and, being on the Buyer’s side, we’ve then accepted on the proviso that the boundary fence is replaced before settlement or another critical maintenance item.
To help you out with the negotiation process, I listed down some things that I’ve learned over the years as a Buyer’s Agent.
7 tips on how you can get the best negotiation outcome
1. Great deals take time.
Don’t rush the process, this could cause the Seller to get frustrated or agitated. This only leads to them pushing back harder.
2. Using cash is a plus.
If you’re using cash to fund a purchase or a deposit, the Seller will be more confident about the sale and will take you more seriously. You can use this to your advantage.
3. Don’t start small.
If you start with an offer that is too low, you may offend the Seller and that may be the end of your negotiation. So, start with a reasonable purchase price and work from there.
4. It’s not always about the money.
Be flexible on the settlement date and include contract conditions such as subject to building, pest and finance approval. It may not seem like a big deal, but this will help you in the long run.
5. Give them options.
Options can help smooth over some conditions and help secure a better outcome. For instance, it sometimes helps to offer a rentback option for a short period as this gives the Seller more time to find their next property.
6. Know when to walk away.
It’s important to recognise a bad deal and have the courage to turn your back. If it’s not worth it, move forward and look for other opportunities.
7. Bring an expert in to help you.
When it comes to something as significant as purchasing property, you want to have an experienced Buyers Agent by your side. We negotiate real estate every single day and know what to look out for. We also have your best interests at heart and will ensure you secure the best deal.
Do you need help negotiating a property purchase?
My team and I at Worth Property Investing are passionate about helping you make the right purchase, in the right location, at the right time and for the right price.
Think of us as your property buying partner, here to support you in making the ideal property decisions. As your trusted, licensed Buyer’s Agents, we do everything from searching, connecting, researching, bidding, negotiating and securing the best investments.
So, let’s start planning your next property purchase and the ways in which we can support you. Speak to us today!
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