As we continue our discussion on Negotiating Real Estate, I wanted to share some more insights on how you can effectively turn a real estate deal to your advantage. When I look at the way real estate deals are carried out, I see a problem. And that problem is professionals working to get the highest price possible on the house, instead of working for you. Remember, agents and brokers are in the business for themselves, not for you. So with that in mind, let’s move on to my next point:
If Possible, Leave the Agents Out
If you can, search out for sale by owner, government owned or bank owned properties. Agents, brokers, and other professionals understand that these properties typically go for less than market value. And with the case of FSBO (for sale by owner) properties you have the opportunity to talk with the owner directly. So to reiterate, realtors are in the game to make money, and since they get paid a percentage of the final sales price, it is in their best interest to get the highest price possible. Avoid them if you can.
Get the Real Estate Negotiation in Writing, Fast
If you choose to negotiate over the phone or in person (which isn’t a bad way to go), be sure to back it up in writing immediately. If you are in person, have the contract papers with you. If over the phone, get a fax number from the other party, fax it over to them immediately, and do a follow up call to make sure they received it, and as them to immediate send it back. If you really want to cover it, ask the other party if you can drive over a pick up the signed contract. If they ask for a time, say “how about now?” The point is, the sooner the better. You want to finish the paperwork while the other party is hot. Don’t let them cool off. People have a tendency to back out of deals if they have too much time to think about them.
Counter Quick & Often
Regardless of the offer or counteroffer you receive, buck it. Make sure that the ball ends up in their court for the decesion, unless you are completely happy with the offer. Even if you are happy with the offer, many times it is worth it to send one more offer, just to see what happens. For the buyer, you should set a high number, and make your first offer significantly less than your established high number. Work back and forth with the seller until you reach your high number. Once you reach your high number, you are finished negotiating. No acceptions. If you don’t stick to it, you will end up paying way more than you originally set out to pay.
For the seller, before you even put the property on the market, you need to have carefully considered the selling price, and a low number that you are willing to accept to sell the property. Stick to that low number as long as you are able. Typically, if you are within reason with your pricing structure, you will be able to sell the home. If it isn’t selling, see if there is some work you can do to the place to make it more attractive. Simple things like paint, carpet, etc. can really help a seller in the negotiation.
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