If you want the best deal on your next real estate investment, you must understand negotiating tactics. From who makes the first offer to walking away, sales negotiations can be a minefield. Here’s what you need to know before entering discussions with a real estate agent
Be Prepared
You can’t negotiate the purchase price unless you know what the property’s worth and how the current market conditions affect its value. Before you put forward any offer, do your homework–this way, you can approach a real estate agent with confidence and make convincing arguments.
Questions to ask an agent:
- How much did the seller pay for the property? This lets you make a more informed offer.
- Has the seller rejected any offers already? Knowing what offers (if any) have already been rejected helps you make a smarter offer.
If you’re confused about the conveyancing process or this is your first investment property, it’s best to instruct an experienced agent.
Understand the Seller
Each seller has their own reasons for putting their home on the market. It’s important to understand, where possible, their situation. Above all else, sellers want the best deal on their property in the shortest amount of time. You can use this desire for efficiency to your advantage.
Questions to ask an agent:
- Why is the seller letting this property go?
- Is there scope for a quick closing?
If you’re investing in real estate, you need to understand the seller’s perspective.
First Impressions Matter
You should use confident–but not arrogant–body language when negotiating. Stand tall, use open gestures and a firm but non-aggressive handshake. Clean, tidy clothing makes you seem like you take the negotiations seriously.
Make it clear you understand how real estate investing works. If you don’t have the confidence to give a great first impression, instruct an experienced agent.
Be Prepared to Walk Away
You’ll never get the best deal unless you’re prepared to walk away from the property altogether. An agent senses this confidence and takes you more seriously.
Things to say:
- I invest in real estate. I know what I’m looking at and what it’s worth.
- I’ve already come up. This is a fair market price and I can settle quickly. ( A sense of urgency is advantageous)
For more advice on how to purchase property and make the best real estate investment possible, see our free ebook.