We were recently asked to help a client with a huge real estate deal. It was a challenge of its kind, and we quickly learned that it’s not as easy as it looks.
There are many things you can do wrong in an initial negotiation and end up losing money instead of making it. But if you know how to lowball and negotiate like a pro, then you’ll be able to get yourself out of trouble.
Whether you’re trying to close a small or a large real estate deal, you can lowball and negotiate like a pro with the following tips.
Do Your Research
It’s important to do your research before you go into any negotiation. You want to know what the market has been like in that area, how much value has increased over the past year, and what kind of properties are available on the market right now.
Once you have this information at hand, it will help you feel more confident about your price point. Make sure that there are no surprises when it comes time for negotiations.
The first thing to do when negotiating with a buyer is to be reasonable. If you’re lowballing too much, or if the deal isn’t fair in any way, then it won’t go anywhere.
The next step is to negotiate fairly and honestly with your seller so they know they’re getting the right money.
When you’re negotiating a real estate deal, it’s important to know your buyer and seller. Knowledge is power when it comes to negotiations.
Here are some questions that will help you get started:
- How much can I afford?
- What is their motivation for selling the property? Is it simply because they need money, or do they have plans to move into another house or neighborhood? If so, what kind of home will they be moving into?
- Does this person have other assets outside of real estate?
- Do they have any financial needs at all right now—like paying off debt—or are these people just looking for something quick and easy?
Eliminate as many Contingencies as Possible
You’ve done your homework, and the seller is finally ready to sell. But before you can make an offer on their home, they want to know that it’s worth more than what they are asking. If a contingency exists in the contract between buyer and seller (and most contracts do), then it is likely that you will have to pay more money than the listing price if something goes wrong with the sale of your home.
To avoid this situation altogether, try eliminating any contingencies as much as possible—the fewer there are, the better off both parties will be when closing happens.
Be Aware of the Seller’s Situation
When you’re negotiating a deal, it’s important to know what the seller is going through. Are they under financial pressure? Do they have a deadline for making the sale? Is there anything else that might make them more likely to take your offer?
If the seller is under financial pressure and needs to sell quickly, they may be willing to accept an offer lower than their asking price.
Don’t Make It Personal
Negotiation is a two-way street. You should be able to negotiate with the seller on your terms and not theirs, but it’s important that you don’t make it personal. The sellers want to sell their property, so they want the transaction to go smoothly and quickly. They’re not looking for an argument; they just want to close the deal as soon as possible so they can move on with their lives.
So while you may feel like you’re being asked questions like “Why are we talking about this?” or “What exactly do you mean by ‘X’,” this isn’t personal—it’s business.
So there you have it, a brief overview of how to lowball and negotiate like a pro on a real estate deal. We hope this has been helpful to you as you embark on your own journey toward becoming an expert negotiator. Remember that negotiating is all about finding common ground with the seller, so make sure that whatever price range you’re aiming for, keep in mind what they are most likely willing to accept as well.