People selling properties are often more flexible than buyers realize, so a bit of negotiation can easily make a real difference. Skilled negotiators regularly save tens of thousands of dollars or more by being strategic about their offers and counter-proposals.
Successful, professional real estate investors almost always develop the ability to talk sellers down. Most often, they save money by relying on one of a handful of proven tactics. A look at four of the most effective real estate negotiation tricks that follow will reveal that anyone can put them to use.
1. Renegotiate After the Inspection
Even after having arrived at an agreement in principle, you still have plenty of leverage. Homes and other properties almost always change hands only after a thorough inspection has been conducted.
Once an inspection report has been generated, take the time to read it very thoroughly. Look for any conclusion that might be at odds with how the property was originally represented.
Any such issue can be enough to merit a rethinking of the original offer, at least under the right circumstances. When you negotiate after home inspection work has been completed, you can leverage the authoritative verdict of an informed third party.
That can easily produce valuable concessions, whether in the form of a reduced price or other financially meaningful compromises. While it is also possible to endanger a deal by being overly aggressive, having inspection results in hand will make it possible to stick to grounded, reasonable requests that should not raise alarms.
2. Justify Your Offer
Buyers in especially hot property markets often feel they have no choice but to make offers that are well above asking prices. It might not be possible to save much by negotiating in such environments, but there are plenty of less-competitive ones.
When it seems at all reasonable to make a relatively low offer, think about explaining why you are undercutting the asking price. That will give a seller something to think about instead of dismissing the offer out of hand.
Coming up with a reasonable, detailed story about why a particular offer is being made will also make subsequent negotiation easier. Even when the seller rejects the original proposal, having the facts laid out plainly will provide some helpful leverage.
3. Learn to be More Persuasive
Successful negotiators in every field inevitably become avid students of human psychology. Many real estate buyers, though, fail to leverage even the simplest and most powerful of psychological insights when negotiating.
Even a little bit of study can pay off. Learning how people tend to think, feel, and respond when negotiating will either give you an edge or at least even the scales. Becoming adept at making others feel as though they are in control, for instance, will make every subsequent real estate negotiation easier.
4. Always be Ready to Walk Away
Even people who try to negotiate aggressively and ruthlessly often end up paying too much for real estate. The single most common reason for this is becoming too attached to a particular property.
Being ready to walk away from a negotiation will spare you from such potentially expensive problems. Having that type of detachment is also an asset that allows you to negotiate from a stronger, less-vulnerable position. Even if you find the perfect house or investment opportunity, you must recognize there can be times when only moving on will make sense.
Negotiation is Easier Than Many Realize
Master these four tactics and you will become better equipped to negotiate real estate deals. Whether for an investor or someone simply looking for a new home, that can prove to be one of the most valuable accomplishments of all.