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Negotiation is an intense process, and more so when you have to convince someone to come to your terms in a bigger deal, say while buying a house. It is incredibly strategic to carry out the entire process because the outcome creates value for both the parties involved. Statistically, real estate deals have shown that one party has the upper hand over the other most of the time. But practically, buyers would want to close the deal at the asking price or lower, and sellers would like to take the amount higher than what's asked. There is constant negotiation tweaking the terms of each party until both parties agree to seal the deal.
Before a negotiation, it is essential to conduct good research on the property's value, market price, cost of inclusions, etc. There should be no room for naivete as the stakes in such negotiations are high. The article below will lay down some tips for negotiations in real estate, filling the gaps in dealing with difficult people and ensuring a smooth process.
Assess the intention of both parties in the deal. Price may or may not be the sole motivating factor behind the sale. Understand the purpose of both the parties in the agreement. Influencing the parties over the importance of the property to both will make them keep talking, probably to the point of consensus. Negotiation skills have a more significant part to play, and it starts only when all information relevant to the property is there, and the presentation appeals to both parties.
Negotiation is a fancy term for facilitating a purchase. So, when the deal is appealing, place your terms politely. Let's understand this with the help of an example. If the cost of the property stated in the deal is $400,000 and with all your research, you know that it is overpriced, start with a relatively lower amount. You can say with confidence that, "I do understand the house is great, yet the property cannot cost more than $320,000." If you have firm support, you can at least convince the seller to bring the price in the range of $320,000 to $360,000.
Try to know the nature of both parties when working out a deal. Doing so will empower you with the hidden weapon as you plan the negotiation. Do not bring out negative aspects of the house even while proving your point. If you have to refer to the house's condition while asking for a lower price, tread lightly. The whole process is emotional, so do not hurt the sentiments of others by comments like the painting is worn out and needs a repaint, so reduce the overall cost. Instead, be quiet about it. Focus on the aesthetic aspect of the house that appeals to the buyer and negotiate.
As discussed above, you should not focus on the negative but be aware of the disruptions. Whatever you have worked out, assessed about the house must be out in the open. It could be about the cost of repairs and maintenance, price, resale value, market rates, etc. The idea is to know the worth of the property, compare costs and be ready with the facts. Sometimes you may have a difficult client to deal with, and actual facts about the property can help you prepare you better than the art of negotiating and buying. Also, remember to have an alternate plan for your prospective client if this deal doesn't pan out.
Communication is the key to building an excellent relationship with anyone. To build rapport with the seller, you must get to their level. Understand why they are willing to sell that property, their motivation, and expectation. It will help you to frame terms acknowledging the seller's wants. Negotiation does not imply that you will tweak the terms for your needs only. Learn how givers are smarter than takers and employ that for your negotiation in real estate. Givers have the quality to change the other party without stating the obvious.
During negotiations in real estate, do not initiate an offer. Let the other party make an offer and then pitch with a counter offer. It is important to listen more than you speak while dealing with such matters. Also, keep your emotions separate. The deal is purely business, and verify all the facts before accepting an offer. Your over-enthusiastic attitude over the conditions may give the other party an advantage to win the deal without considering your demands. Assess if the deal is worth investing and if so, move on or else walk away. There will be many other properties that will cater to your conditions.
Clarify who is to bear the costs of repairs and maintenance in the deal. If it is the buyer, then negotiate for a lower price for the property deal. Find the red flags and incorporate them into your offer. Work towards a win-win situation. It is one of the effective negotiation tactics used by buyers that makes sense to both parties. Understand the inclusion process, i.e., if the seller has included the appliances in the deal. Many times the furnishings and the appliances are separate and negotiable. The buyer should get an explicit aspect of this notion before signing the agreement.
The art of persuasion implies approaching in a way that the other party cannot overlook. Imagine a property that's supposedly the dream house of your client, but it has many applicants. So, how can you ensure the seller notices your client? Well, ask your buyer to send a personal letter claiming how they appreciate the intricacy of the property and what it means to them. That does not mean that the seller can quote whatever they think fits. It only means that the seller gets a glimpse of what that property means to this particular individual and if the buyer's offer works feasibly to the seller. In any way, you must have a way to work that deal through persuasion techniques.
From the above points, you must have realized that negotiations in real estate are not a cakewalk. It requires a skillful strategy to get close to the other party, understand their aspirations, research well and be creative in your approach. In any case, stay in control of the deal. Do not let the other party walk over you with their conditions. Don't submit to them being emotional. Focus on a win-win strategy if possible and understand the power of truth. In a changing market and among difficult people, following these tips will ensure you get your client that dream house and cultivate an excellent business relationship.
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