You can never have too much negotiation power. The more you’re prepared, the higher the chances of getting a good deal.
My advice is that you should go into a negotiation assuming the seller knows how to get the asking price.
But do you know how to get your price?
Don’t sweat it. Here are four tips for negotiating better deal terms:
- Be Honest
To present yourself as a serious negotiator, you might feel compelled to twist the truth when talking to an agent. Some investors tell tall tales about how they’re looking at all sorts of high-end properties.
Stay away from that tactic. It’s much better to be open and honest about what you need.
Since agents get their commissions from the seller, you might think that all agents work in the best interest of the seller.
But this doesn’t have to be the case. If you’re honest, you can win the agent over and secure their help in scoring a good deal.
- Keep the Upsides to Yourself
When talking to a vendor, you ought to avoid dwelling too much on the property’s upsides. In fact, you’ll want to avoid talking about them completely.
That’s because they might think about increasing the price, knowing that you can make more money out of it. It’s just human nature.
On the other hand, a vendor might talk about the upsides and forget about them. You’ll want to jot down those benefits but not mention them again.
Then the vendor or agent won’t be able to use those upsides against you in the negotiation.
- Consider Making a Soft Offer
When talking to an agent, you must always get straight to the point, especially with regard to an overly high asking price.
For example, if your limit is $850,000 and you’re looking at a $1 million property, you should inform the agent straight away.
In this situation, you might want to go with a soft offer.
This means informing the agent that you can afford up to $850,000. And then asking if the vendor is really looking to get $1 million.
In some cases, the agent might tell you that the owner doesn’t expect that much. They might add that the highest offer so far is close to yours. You don’t need me to tell you that this would be great news. There’s going to be room for negotiation.
With this approach, keep in mind that the agent’s interest is to make a sale and get paid. They’ll be willing to help you close the deal as quickly as possible.
Keep in mind that this is NOT lowballing (as some buyers do) you need to know exactly what the property is worth and base your soft offer on the facts and the returns you want to get from the deal.
- Show that You Know the Market
As soon as you start negotiating, you’ll want to show the agent that you know what you’re talking about. You don’t have to be a smarty-pants about it. But you should let them know that you know the area you’re buying in.
For example, you can tell the agent that you’ve looked at similar properties that sold at such and such prices.
This might convince them that they can’t manipulate you into buying a property that doesn’t suit you for whatever reason.
These tips should help you enter a negotiation from a position of strength. It’ll show the agent that you’re a serious buyer so they should help you close the deal.
To learn more about getting a great deal, sign up for my webinar.