Negotiating may be the most critical part of the real estate purchase process. Being able to strike a advantageous deal with the seller virtually guarantees your profit. Negotiating is both an art and a skill that you will master with time and practice. Here are six tips to get you started.
Know the Property
You should know as much as possible about the real estate purchase you’re about to make. This knowledge comes from researching the neighborhood and knowing how the property compares to others around it.
Know the Seller
The best way to learn more about the seller is to listen. People will be more likely to volunteer information if you give them a chance to talk. But if you aren’t finding out what you need to know, ask questions. Understanding the seller’s situation and their possible flexibility will help you negotiate financing options as well as price.
You also need to find out what the seller’s motivations are. Why are they selling? Understanding the reasons behind the sale can help you structure a deal that meets their needs and yours.
The best real estate purchase deals result from negotiations that seek to provide something to both parties. There are certain things you want out of the deal and certain things the seller wants in order to sell. Every real estate purchase has several facets. If you can give the seller something they want, that will increase your chance of getting something you want.
Negotiate Terms, Not Just Price
Price is not your only negotiating point. Sometimes the terms of the deal are more important to the seller than the price. Once again, if you can address the seller’s needs in a real estate purchase, your offer will be more persuasive.
If the seller counters your offer with an offer of his own, don’t let things spiral out of control. Prepare for counter offers by starting your negotiations low. Don’t focus on price, but use other aspects of the deal in your negotiations. Don’t re-negotiate things that have already been decided.
Be Prepared to Move On
Don’t walk away from an attractive real estate purchase without offering your best deal, but know when it’s time to walk away. There will always be another property.
As you can see from these tips, negotiating a real estate purchase is more than two people in a room. Negotiations are won or lost in the preparation. Achieving the outcome you desire depends on your research and mental preparation.
Copyright © Karsal Pty Ltd.2006 (Fixer Upper Fortunes). Full copyright reserved Karsal Pty Ltd, (Fixer Upper Fortunes). Bloggers and journalists are welcome to link to posts or excerpt so long as full credit/attribution is given to MyRealEstateInvesting411.com and Karsal Pty Ltd.
Sal Vannutini has quickly established himself as the “go-to” expert in the game of fixer-upper real estate. With over 19 years of “in-the-trenches” real estate investing experience, as well as helping hundreds of ordinary investors achieve their ultimate success, Sal is ready to help you achieve your financial goals and lifestyle from real estate investing. His study course Fixer-Upper Fortunes is the definitive guide on investing in fixer-uppers and foreclosures.