If you are looking to negotiate the purchase of a business property or a domestic dwelling there are some tricks of the trade to ensure you get the best deal for yourself. Unless someone takes the lead in the negotiations they can drag on for some time and ultimately there is no guarantee they will be successful. So, what can you do to ensure you get the best deal in any real estate transaction?
Cash is king
Whether you bought a property 20 years ago or you are buying a property 20 years from now the simple fact is that cash is king. The ability to put cold hard cash on the table with no strings, no sales chains and no delays, can significantly increase your chances of negotiating a good deal. In many ways it depends on the price you are willing to offer for a property but obviously you start from a relatively low position and work your way higher.
It cannot be under estimated exactly how strong a position you are in if you have cash available to purchase a property immediately. Make sure you make use of this!
Insulting bids and short negotiations
While everybody is quite within their rights to offer what they “believe” to be the true value of a property, insulting bids will not go down very well. It is all good and well trying a low pitched offer but if the price is seen as an insult by the seller then this will put them on the back foot straightaway. Even if you then go back with a “reasonable offer” there is every chance that the seller has had enough and moved onto the next potential buyer. Try to keep everyone on side as you look to purchase a property and, while God loves a trier, do not test their patience!
Are you willing to pay a premium?
When individual properties are in demand a seller can quite often extend the negotiating period on purpose to squeeze the maximum price from all parties. If you have set your heart on a property, and you see real value in the longer term, some buyers will in extreme circumstances offer to pay a premium to close the deal. This may seem crazy in the short term but if the market is moving higher, and the property in question is much sought after, you may well need to pay a small premium for success.
Do your research
You will notice that we mention on numerous occasions what you see as a fair value for any property you want to buy. While you can look at the selling agent websites, you can listen to their sales patter the fact is that you need to do your own research beforehand. You should go into any negotiations with an idea of the “fair value” and try to close a deal within a relatively small range either side of this figure. If you do not do your homework before entering negotiations there is every chance that you could be drawn in by the sales pitch and end up regretting the price you paid.
In order to be successful in any negotiations you need to have a target in mind, have a degree of flexibility but work within your comfort zones. There may be times when you need to pay a little extra to close the deal but this will only be in extreme circumstances. Stay firm, stay focused, respect the seller but ultimately don’t go over your budget.
One more trick – if negotiations are stalling, give the seller a short time scale to respond to your offer because this can very often focus the mind! You should receive a swift response one way or the other, leaving you to close the deal or move on.