The Art Of Negotiating A Perfect Real Estate Deal
Keywords: Real Estate Investing, Orlando Real Estate Investments
Five basic principles can be identified to encapsulate the cardinal rules of successful real estate negotiation.
1. Getting the other side to make a commitment first: You will always find yourself better placed if you can manage to make the other side commit their position before you make any commitment yourself. The advantage may be on account of a number of reasons such as:
.. Their first quote may be more advantageous than your own offer.
.. It allows you to be aware of their position before you give them any information from your side.
.. It lets you bracket their price, which can reveal a broad range within which the negations can be finalized. You are then in a position to split the difference to close the deal on price and terms suited to your advantage. Conversely, if you reveal your position first, the other side may be able to control the negotiations in a way that it ends with an advantage.
2. Start by making an initial offer that is below what you are willing to finally pay: When you come to the point of making an offer or quoting your price, always start with offering less than what you are actually prepared to pay. This will leave you with bargaining space and price negotiations. The seller may acquiesce and you may have to pay less than your maximum price.
3. Try appearing dumb instead of smart: Seek information by asking a lot of questions to give an impression of a person possessing limited understanding about real estate matters. Never display sharpness especially about property dealings, as sellers are wary of people who they think are smarter than them. This can hinder negotiations and may create a situation where the deal may fall apart. The dumber you appear the better are your chances of a good deal. Assuming a helpless demeanor may in fact work to your advantage.
4. Appear to be in a limited authority role: When negotiations seem to be heading for a deadlock, say that you need to check with your partner/wife/family members as you cannot make a decision on some point in issue on your own. This approach is found to be better as sellers more easily accept a situation where you are unable to do something rather than agree to a situation where you are unwilling to do something.
5. Gain information about the sellers deadlines and use them as negotiating tools: There may be a number of deadlines that are relevant for the seller. If you have this information, it can be tremendously advantageous for negotiating a favorable deal. For example, the seller may have a deadline on time, as he needs to move his child to a school at a new location and would like the deal closed before the new session starts.
Consider your own position to determine what tops your list in terms of importance in the transaction. Let us say it is the price. You may already have quoted the price in the offer, but it is subject to inspections and negotiations in the process and inspections take time to be completed. You end up working on everything in the deal other than the price and let the inspection linger for as long as possible. Negotiation is a skill and an art that requires patience and level headed thinking.
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