When negotiating a deal, you must know what you’re up against. I don’t mean this in the literal sense, since you likely won’t be talking to the vendor directly.
What I mean is that you should know as much about the seller and the property as possible.
The right knowledge can give you more negotiating power. In many cases, this can result in a better offer.
So how do you get the upper hand in a negotiation?
Here are a few tips to follow:
- Know the Seller’s Background
When you look at the asking price, you know the figure but not how the seller arrived at that figure.
In order to find out, you must research the seller’s background. You should dig deeper than what you see on paper and see if you can use this knowledge to create some wiggle room.
For example, the seller might be the owner of a business they’re looking to get out of. You can use this information to see if they’d be willing to lower the price so they can sell more quickly.
Most of the time, the price can be quite flexible. The key is to find out what you can do to bring it down a little.
- Know the Seller’s Market
Oftentimes, a seller will jack up the price because they’re emotional about the property. In that case, the price won’t reflect the property’s actual value. You can use this to your advantage and educate the seller about their price.
You can do this in any number of ways.
Let’s say that the asking price is $1 million. But you have good reason to believe that it’s worth less, since a similar property just sold at $900,000.
You should definitely inform the seller about this. It’s proof that the price is too high. And then they might be willing to come down on the price, especially if the property has been sitting on the market.
Of course, not all sellers are going to be happy about this. But if you can show hard evidence that the price should be lower, they might be more open to hearing you out.
- Don’t Be Overeager
For a seller to take you seriously, you should show an interest in their property. Otherwise, they might not be willing to negotiate, afraid that you’re just kicking tires and wasting their time.
Conversely, it’s equally bad – or even worse – to be too enthusiastic about a property. This can make the seller think that they don’t have to negotiate, since you’re dying to buy it.
This is why you need to find a sweet spot. While it’s fine to show interest in a property, inform the agent that you’re also looking at a few other options.
This will inevitably get to the seller. As a result, they might be willing to budge a bit to win you over.
In tandem with this, don’t call the agent every day asking a bunch of questions. Even though you should stay in touch, being overbearing can come off as desperate.
If you follow the above advice, you should have no trouble getting a better deal than the initial offer.
To learn more about boosting your negotiation power, sign up for my webinar.