As a realtor, you spend countless hours showing homes and trying so hard to find the right one. Once your client has found the perfect abode, now comes the real work. Price negotiation can be the most tedious part in the entire process. The buyer has what they are willing to pay and the seller has their number in mind. While you have the advantage of knowing the buyer’s bottom dollar, it is not every day that you know the seller’s intent. The back and forth drama of the negotiation process is tedious, but here are some tips to help you negotiate like a pro.
Learn The Motivation of Buyers/Sellers
If the buyers are in a hurry to buy because they have a new baby on the way, then they may be willing to pay more based on circumstances. First time homebuyers are often a novice to the process, and they typically overpay too. On the seller’s side, it is important to know why they want to sell. Do they have another house they are buying that is pending the sale of this house? Perhaps they are moving due to a job transfer and need to leave as soon as possible. All of these factors should be considered in the negotiation process.
Know The Market
It doesn’t really matter if the sellers want $250,000 for their bungalow if the comps in the area are selling at $200,000. It is not uncommon for sellers to have unrealistic prices on the homes. Whether their working with another realtor or not makes no difference. Realtors will often list homes higher than normal to leave room for negotiations. Armed with knowledge, making a solid offer is better. If the home is priced too high, getting financing at the above market rate won’t happen.
Give Realistic Bids
When working for the buyer, be sure to communicate to them what houses in the area are going for. Low balling is a common trick done by most homebuyers in an effort to get the sellers to their bottom dollar. While this trick will work some of the time, it doesn’t work with all sellers. In fact, some sellers may be offended by an offer below market value. A seller doesn’t have to come back with a counter offer and they can stop negotiations at any time. Try to come in first with a strong offer that has a bit of wiggle room.
Don’t Forget The Little Things
Sweetening the pot is a good way to motivate a buyer or seller. If down payment is a problem, then the seller can offer to pay closing costs. If the buyer knows the seller wants to leave town ASAP, they can offer a quick closing. Don’t overload the contract with things like washers/dryers and the stove and fridge, make it something that the sellers need, a quick close or cash deal.
By following a few simple tips, it is easy to negotiate a deal like a pro. Each deal is different and so the techniques used must be as varied as the people that they are being used on.