The hardest part of any investment is negotiating so that you can get the best deal. It’s very unusual for an investor to say that they got everything that they wanted at the price agreed. However it is possible for anyone to learn negotiating. The two most valuable things we have are knowledge and information, these can greatly improve the success of your negotiations. You need to make sure that you know everything about the market, the seller and the law.
You need to find out as much as possible about the seller, especially whether or not they are approaching foreclosure. Is there anything which is causing the seller to sell very quickly and at a reduced price? You should try to work out how quickly they would like to close. This can be worked out by looking at how long the property has been on the market for, how many offers has it received. Even knowing how much debt they have can be very useful in deciding whether or not they want to sell quickly. Most sellers will not want to give out that information voluntarily, so you need to draw it out of them fairly slowly.
You will be able to find out about the real condition of the house by employing a professional to look around the house. You also need to be aware of the local market. How many comparable properties are there? What are these selling for? You can find Comps from brokers or even online. Try talking to the neighbors of the homes that were sold recently. When you are looking at comparing properties note down the condition of the homes to try and see what is happening. Neighborhoods as a whole can deteriorate or improve, this will affect the property prices.
When you know both the seller and the market you should make sure that you have all of the other tools you need before you start to negotiate. Make sure you have already arranged the financing, get pre-approved not just pre-qualified. When people can ‘smell’ the money it is much easier to negotiate. When suggesting an offer do not suggest a round figure, suggest something like $253,300 instead of $253,000. The extra $300 may not seem like a lot but it will catch the seller off guard. Sellers will think in percentages, and $253,300 seems much more desirable. As with everything it is possible to negotiate on anything, not just on the cost of the property. Make sure you know exactly what you are negotiating for when you start. This is true if you’re looking for property in Costa Blanca, Manhattan or anywhere in the world.
It is possible to negotiate the percentage of closing costs which are covered, you can also dictate which items should be covered such as realtor fees, title costs, repairs, insurance and so on. However you must be realistic, you won’t get everything you ask for.
It is important that you have enough legal and accounting advice or knowledge. If you don’t personally possess these skills then make sure you ask for help. Go over any offers with professional people so that they can offer their advice. Try not to fall in love with anything, and walk away if something isn’t quite right.
Author: Jack BlacksmithThis author has published 12 articles so far.