Negotiations form a large part of the process of selling a property. Buyers expect negotiation, and with that in mind, they’ll always ask for a slightly higher price, so they don’t have to settle for less than they’d hoped. On the other hand, you don’t want to pay more than you should. That means you need to be well prepared. To help you, we’ve put together some tips on how to successfully negotiate the price of your property.
Good negotiation requires patience and organization. Hopefully, by the end of this article, you’ll have mastered the skills needed to negotiate the price of a property. Let’s go!
Before you start negotiating the price of a property
When it comes to real estate these days, you’re in for a real treat. In today’s market, there are a lot of buyers, but not enough properties, making the buying process much more complex.
Be sure to research the local market thoroughly. The real estate broker you hire should be able to help you with this.
However, before you start negotiating the price of a property, there are a number of factors to consider. These include:
- Get your finances in order – To avoid having the property slip through your fingers to someone else, you need to be able to demonstrate to the seller that you will be granted a mortgage. That’s why it’s important to get pre-approved for a loan before submitting an offer to purchase.
- Working with a real estate broker – Thinking of looking for and buying a property on your own, without anyone else’s help? Think again. Sure, you can look at properties on the Web, but a professional broker will be your best ally and can really help you negotiate the price of the property you’re after.
- Get to know your local market – Retaining the services of an experienced broker will help you learn more about the surrounding market. It’s important to know whether the market you’re targeting favors buyers or sellers, so you can determine the best time to submit your offer.
Our tips for negotiating the price of a property
Now that you’ve taken the first steps towards buying a new property, it’s time to negotiate the price. Here are our tips to help you make the best possible offer.
Tip no 1: Communicate through your respective brokers
There’s a huge amount of technical vocabulary with which you’re probably not familiar – much of which you can learn by working with your real estate broker. For example, people often confuse a property inspection with an appraisal, when in fact they are two completely different things. By obtaining an appraisal report instead of an inspection report, you could make a mistake and buy a property at a much higher price than its true value.
By retaining the services of a reliable real estate broker, you’ll benefit from an ally who can help you negotiate and obtain the best possible price for a property you love.
To help you avoid this kind of mistake, make sure you deal with a reliable and experienced broker. Your broker should handle all the dealings between you and the seller. Since you’ve hired this broker to represent your interests, you can rest assured that he or she will make the right decisions on your behalf.
Tip no 2 : Find the reason for the sale
Getting more information about your seller will help you negotiate to your advantage. Your real estate broker can help you find the information you need. If, for example, the seller is divorced or has already bought a new property, he’ll probably be in a hurry to sell. You’ll be able to negotiate a better purchase price.
Keep in mind that moving to a new property can be a demanding and stressful experience, so you need to be well prepared. Once you’ve agreed on the price and conditions of the property you want, make sure you can count on reliable movers to help you make the transition as smooth as possible.
Tip no 3 : Have the property inspected
One of the most important tips for successfully negotiating the price of a property is to hire a certified building inspector to carry out a thorough inspection of the property you wish to acquire.
A building inspector will evaluate your property and detect any problems with the heating, foundation, ventilation and air conditioning systems, and more. Once you’ve received the inspection report, if the inspector has found any problems, you can ask the seller to give you a credit towards closing costs and to resolve the issues identified, or request a reduction in the asking price.
Tip no 4: Determine the amount of closing costs for the purchase
If you think that the down payment you give will be your only cost when buying a property, you’re wrong. There are many more closing costs, and these are paid to your lender for processing your mortgage.
Ask your broker to negotiate closing costs with the seller. You’ll be amazed at how many sellers are willing to do their part.
Closing costs usually amount to 3-6% of the value of the mortgage. They most often include credit check fees, inspection fees and appraisal fees. In some cases, if the seller is in a hurry to sell, you can
Tip no 5: Don’t be afraid to show emotion
Don’t forget that buying and selling a property is an emotional process, and that there are many tasks to be completed before the sale takes place. Put yourself in the seller’s shoes and you’ll soon realize that what they want most of all is to find someone who will take as much care of their property as they have.
One of the most effective tips for negotiating the price of a property is to include a personal letter to accompany your offer. This personal touch will make your offer stand out, and even if you haven’t bid high enough, you’ll be able to influence the buyer to favor your offer.
Tip no 6: Start with the lowest price
As we said earlier, most sellers ask for a higher price than they expect to get, because they take into account the negotiation process. So the best thing to do is to start with an offer lower than the asking price.
However, you do need to do a bit of initial research to see how far you can go with your starting offer. To do this, consult your real estate broker. He’ll be able to give you sound advice, whatever your situation.
Tip no 7: Don’t hesitate to withdraw
If you’re dealing with a seller who is absolutely unwilling to reduce his price, don ‘t hesitate to walk away. After all, this seller probably has several bids in hand and is in a position to set his or her own requirements. You may be tempted to go ahead with the bidding, but we strongly advise you not to go that far.
The best thing to do is toadopt a selfless attitude and pull out if things don’t work out as you’d hoped. Also, make sure you don’t get too attached to the property you covet: you run the risk of going over budget and getting into more debt than you had planned.
In conclusion
Negotiating can be intimidating and even exhausting, especially if you’re buying a property for the first time. By retaining the services of competent professionals to help you, the process will be much easier and far less stressful. We hope you’ve found our tips for negotiating property prices useful, and wish you the best of luck when buying your next property!