In real estate, good negotiation plays an important role in winning the bargain. Succeeding in the negotiation stage is a daunting affair for both buyer and seller, as both parties aim for a favorable outcome or something satisfying their interest.
Finally, at the end of negotiations, they either apply some tricks to influence the other party or come to a mutual understanding. This shows that both parties may not get all the things they aimed for, but they may compromise after the negotiation.
Mentioned here are some vital negotiating guidelines that will help you have the last word in the bargaining process while making the most out of the transaction.
Key Aspects to Consider Before Negotiation
1. Keep A Watch On The Market
Buyers and sellers should keep a constant watch on market trends to look for situations that can be favourable for them for making real estate transactions. Keeping a watch on the trends as well as supply and demand issues helps in negotiating.
However, as not all the properties are same, it is possible to gain high leverage, which the marketplace may not allow otherwise.
For instance, if you have a nice property in a popular neighborhood where there are few properties available for sale, you can strike a good deal even if the market does not apparently favour sellers.
2. Know Who Holds The Leverage
Usually, the buyers hold most of the leverage in the initial stage of negotiations. Later on, they may slowly lose advantage until the property sale becomes final. However, to finalize the property, the owner chooses the best offer that suits price and terms.
3. Have All The Details
Find all the details before negotiating which mostly include transaction costs for both buyer and seller.
To make a good deal, the buyer may look for concessions that sellers offer. While a seller looks for making more profit without giving any concessions.
This is an important factor for both buyers and sellers as without a proper financing method, a buyer does not qualify for making the purchase while a seller may find it hard to conclude a transaction.
In the case of pre-qualified buyers, the risks are less for the sellers as they can ensure that such types of buyers are eligible for some financing programs.
5. Prevailing Interest Rates
A potential buyer may look for a lower down payment and interest rates. This situation is also good for sellers as low interest rates attract more buyers, raising the demand for the property.
6. Assess Who Has More Expertise Before Making The Transactions
The party with more backup and representation is entitled to win the bargain. However, both parties must not underestimate one another.
In addition to these points, there are a few behavioural aspects which need to be kept in mind while negotiating the final deal:
Speak Directly – It is advisable to speak directly to the seller instead of via phone. Face-to-face conversations help you respond correctly and build rapport with the seller.
Be Tactful – While conversing, let slip that you are well versed in the trends of the market and can decide the value of the property by seeing it. Further, prepare to ask a few knowledgeable questions so that the other side becomes aware that it is not easy to con you.
Be Polite And Don’t Get Bullied – Staying cool and polite at the time of negotiation makes both parties understand each other’s requirement. At the same time, walk away from the deal if you are being bullied, as there is nothing wrong in doing so.
Evaluate Your Position And Be Flexible – If you know the seller has other good offers, and yours isn’t that great, it is advisable to increase the offer a bit to avoid losing hold of your dream property for a small sum.
Sellers too must show some flexibility, in case they are in a rush to sell as losing a potential buyer for a small sum may prove to be costly.