As with any other transaction involving substantial amounts of money, negotiation is a very significant part of real estate buying and selling. Both the buyer and seller do their best to finalize a deal that works to their advantage, with success going to the one who is more skilful negotiator of the two.
As a buyer, you should be thoroughly prepared and do the homework before stepping out to look at the properties on the market. You must work out a negotiation strategy beforehand and that starts with understanding the market conditions under which you will be operating. Be aware whether you are going to purchase property in a seller’s market, buyer’s market or a balanced one.
In a seller’s market, demand is much more than supply and therefore, the seller has more clout than the buyer. In such conditions, you should be straightforward, not ask for unreasonable concessions and be quick in sealing the deal if you find a place that appeals to you. However, if you are in a buyer’s market where supply of properties of the kind you are looking for is in access of the demand, you stand a good chance of getting the seller to agree to your price.
It is in a balanced market where the demand and supply match each other that your negotiations skills get tested. Generally, the sellers tend to behave as if the property they are offering is something extraordinary and so price it unrealistically. The buyers should be smart and be updated on the current market rate to make sure that they don’t get ripped off. In fact, knowing the going sale price of comparable properties is one of the most effective negotiating tools.
If you can enquire around and find out whether the seller has any urgent need or specific motive behind selling the property, you can bargain and price your offer accordingly. Another thing you can consider is to concentrate on the properties that have long been on the market. The fact they have remained unsold does not necessarily mean a defect with the property. You might find it most suitable to your needs and will have every chance of stealing a good bargain from an eager seller.
Throughout the negotiating process, make sure that you handle things in a personal, face-to-face meeting. Even if agents are involved, meeting in person should be stressed upon as this puts you in a better position to convince the seller and push your price through.
Lastly, don’t make negotiation an ego issue. Be ready to walk away from a bad deal and don’t hesitate from paying for something that is just what you wanted even if the price is not reduced to the figure you had hoped for.