Ever had to haggle over 150 baht for a pair of knock-off Ray-Bans from Thailand? Cool, well forget everything you think you know, because real estate negotiations are nothing like that – at all. When a few hundred thousand dollars are on the line, you’ll need a more tactical approach than simply asking ‘is that your best price?’ So, what do the experts have to say on the subject? How do you become a negotiating ninja with sick skills in property scoring?
Here’s our black belt tips on how to negotiate like a pro.
Do your research
To gain the ultimate upper hand in real estate negotiations, do your homework. Knowledge is power, and the more you know, the better your chances are of scoring a deal. If you don’t know what’s on the market and for how much, you have no point of reference for knowing what a reasonable offer is to make or accept. You can easily access sold properties online by going to realestate.com and filtering to your specifics for reference.
Trying to bully your way through real estate negotiations is probably the quickest way to lose a deal. Business is business, but agents and sellers are also people, too. Nobody likes aggression or confrontation and being rude to assert your dominance will not go favourably for you. It is possible to have respectful negotiations, and most sellers are more than willing to meet you in the middle.
Make a respectable offer
Making an offer well below the selling price is really not the best move. Generally, anything more than 10% less than the asking price won’t be taken seriously. It’s important to note that most properties sell for on average 3-5% less than the listing price. Anything outside of this bracket is questionable. If you really like the property there’s no point in low-balling the seller to get a better deal – they know what their property is worth and you probably won’t get a second look once you’ve got them offside.
Back up your asking price
If you’re a seller, it’s important to be able to show evidence as to why you’ve set that listing price. This could be similar property sales in the area, certain features or renovations, or something that adds particular value to your home. It can be hard to put a price on the home you love, but ultimately, your property is only worth what someone is willing to pay for it.
Put it in writing
If you want your offer to be ahead of the rest, put it in writing. A written contract is far more compelling than a verbal one, and it shows the seller that you’re serious. An offer with the most straightforward terms will be the most favourable, so if you’ve found a property that you’re 100% sold on, don’t be afraid to get straight down to business.
Check your emotions
Finding a house that you simply adore can have you bordering on psychosis trying to secure it. You need to know your limits and not let emotion take over. If negotiations are falling beyond your reach and the price just isn’t right for your budget, then neither is the property. Know your range. It’s okay to walk away.
Buying a property is usually the biggest and most exciting purchase you’ll make in your lifetime. If you know how to negotiate effectively you’ll reduce the risk of another buying swooping in to steal the deal. A little bit of tact and some sensible decision-making will have you popping the bubbly on your new back deck in no time.