Negotiation is extremely important in property investment field, as everything in property investment is negotiable. If you want to get the good deals, you have to negotiate for it. But, if you think you’re not good at negotiation, it is mean you can get involved in property investment? Definitely not! All you need to do is learn how to negotiate for a great deal.
Here are 8 secret negotiating tips straight from the experts to help you learn the trick of negotiation.
1. Study comparable sales
➟ Extract more information from the selling agents
➟ If you go to an agent with comparable sales on hand, a legally reviewed contract and an understanding of demand in the area for this particular type of property, you should be in a position to talk honestly with the agent about which recent past sales are reliable, comparable sales. Agents will generally chat more openly about their honest opinion when the buyer has educated themselves.
2. Cultivate goodwill with the agent
➟ It’s true that they’re working for the vendor, but don’t underestimate the power of being genuinely nice towards the selling agent. Treating the agent politely might just get you the crucial information about the vendor’s situation and their expectations.
➟ For example, they may tell you what the vendors value in terms of the pace of the transaction, the style of communication, their desired terms and any extra things you can do to enable a smoother transition for them.
3. Establish the agent’s rules before negotiating
➟ To help strengthen your position, you also need to understand how the agent will handle offers and counter offers.
➟ Find out if they will call the vendor immediately or whether they sign up the offer or facilitate a counter-offer. Will they call other buyers before selling it? And if so, how will they deal with competing buyers?
4. Identify some potential weaknesses
➟ Always have at least two negotiation points up your sleeve.
➟ You can use it to show the agent that while you’re interested in the property, you know that there are issues within the property that should make the price be discounted as a result.
5. Understand the vendor’s position
➟ Find out what the vendor’s motivation is for selling. Are they time-restricted and have to sell, or not?
➟ The more you understand their motivation, the more you understand what to offer.
➟ Sometimes offering a shorter settlement period can chump a few thousand dollars off the deal. Paying a deposit on the day could also close a deal. That’s why you need to extract as much information to know how to present the best offer.
6. Make sure your offer is clear
➟ Sometimes just being succinct and leaving it be is the best option. Following up too soon, asking where the offer is at, and asking what the next steps are a hint to the agent that you have more money up your sleeve.
➟ Don’t say the offer is your best or last though unless it really is. Agents can’t be held accountable for selling at a higher price to a competing buyer if you have told them it’s your last offer.
7. Tell the agent about your Plan B
➟ By this stage, you should have built up a rapport and a bit of trust, and equally, you know your values, are actively looking to buy and should have a Plan B property you are prepared to pursue if this one doesn’t go your way.
➟ If the agent knows that you aren’t entirely emotional, and also motivated enough to walk to the next one, they will feel compelled to keep things moving for you.
➟ No agent wants to lose their leading buyer. Nothing feels worse than telling a vendor that the buyer who made a reasonable offer is now out of the market.
8. Don’t be too greedy
➟ Ultimately, the deal has to be a win/win for all parties. Without the agent’s support, the deal can topple over.
➟ Without the vendor’s support, even if the sale proceeds, you will have to face a settlement and handover with a person who may feel quite negative towards you.
Keep in mind that don’t push the negotiation so hard towards the seller, as you don’t want that the seller will have a bad feeling on you. Besides, you have to train your patient and control your emotional. When negotiate with the seller, remain poker face, don’t let the seller guess how do you think on the deal. Good Luck!