Tuesday 18th October 2016
How to negotiate in real estate?
In any kind of market the goal is to close the deal. Real estate market is a market which is more dominated by seller than the buyer. In any market, sellers want the highest price and buyers want the best deal, the two have to meet somewhere in the middle for the deal to close. Negotiating for a home is important since this is the largest asset most people own and there’s potentially a lot of cash at stake.
For those new to the real estate, the negotiations start once the seller receives a written offer. Since everything is negotiable, agents for the buyer and seller go back and forth in writing, whether that communication is via email, personal meet or signed forms. The objective is agreement on the deal’s terms, which include price, time lines, contingencies and items that may convey with the property. There’s an important phrase for the buyer to be aware about .i.e., if you don’t ask, you don’t get.
Negotiation is really an Art in Real Estate. "Art of negotiation" is not just a simple quite exchange, but rather a continuing effort that gets the deal going. The art of negotiation can be successfully attained by trying some of these things:-
- Respect the Seller – This is a very important aspect of negotiation and most skipped one by buyers also. If you respect the person ahead of you then chances of getting your price heard become more. If you have forced the seller’s sense of pride to over-rule their desire to sell the home then it is very difficult to correct it.
- Look for repairs – Inspect the house carefully and look for the things that need to be corrected. This may help in reducing the cost of repairs and construction from the total cost of the house. In case of outdated structure a buyer can also ask for a lower price to bring the home’s price back to today’s standards.
- Base your offer on the home value, not the list price- The recent sales in the neighbourhood give you and your agent ammunition and information. If a home is priced at or below market value, you’re unlikely to get it for less. If it is priced above market value and has been on the market for a while, a lower offer accompanied by a market analysis may get you the home. And quality of the home matters too as there may be a possibility that the sale in the neighbourhood may have been low on quality than what you are offered.
- Learn to Compromise-No matter what your price range, you won’t find a perfect house. You’re likely to have to compromise on features, size or location. Enter your negotiations prepared to compromise, and you’ll be a step ahead.
The pace of home sales has slowed since last few years in many cities, and buyers are gaining a little more leverage. Plus, many buyers are dealing with sellers who don’t realize that home prices are not rising as fast as each passing year. That creates opportunities for negotiation and certainly an opportunity to buy the home of your dreams...not dreams, budget...