Tips For Negotiating With Real Estate Agents
When it comes down to it, investing in property success involves two things. The first is purchasing the right property and the second is purchasing it at the right price. In this read, we are going to look at the second aspect and particularly negotiating the price you want.
Ask About the Lowest Price They Will Accept
This tends to sound simple, but it is amazing for real estate agents how rare this question is asked. The answer you will get will vary depending on the individual you’re dealing with and a real estate agent can be more stubborn and protective than a vendor. You will not always get an answer, but if you do, it can be a game changer.
The real estate agent or homeowner may give you a totally different number from the asking price, and it’s not likely that this will be the lowest price that they will accept. However, having a new base price for the negotiation can save you thousands of dollars in the final figure.
Depend on a Higher Authority
An excellent tip when it comes to real estate negotiations is to tell the other party that you have someone else you need to refer back to. This could be a mortgage broker, solicitor, family member, business partner, etc.
This is something that you need to do at the beginning of the process, primarily for two reasons:
-You get adequate time to make decisions. You can buy more time by telling them that you need to discuss the decision with your ‘’partner’’.
-It also allows you to create a rapport as an equal to the real estate agent, while your ‘’partner’’, makes all the hard decisions. This is simply known as good cop bad cop.
Maintaining your rapport with the agent is vital and having a partner in the background will help achieve this. It is a proven fact that investors who get better deal terms usually have a great relationship with the seller than the competition has.
Avoid Putting in More Than Three Offers, And Don’t Give One With a Round Number
These are two tips in one, but they are very crucial when it comes to creating a property portfolio. When negotiating with a real estate agent, appearance is everything. It’s important that you come out as professional and serious and how you put in your offers is a core part of that.
In the initial offer, people expect it to be a bit low and expect to negotiate the price a little. The first offer is often deemed as testing the water. Giving the final offer in this stage seems aggressive and can resisting to move on an offer can create barriers between you and the agent, thus making it difficult to get a win-win deal.
In the second offer, you both get a chance to give a little ground and reach an agreement. This is your opportunity to show some willingness to be fair and perhaps for both parties to meet halfway.
However, if the second offer is not accepted, the third one needs to be the best and final offer. If you increase the number more, you won’t be taken seriously and the deal can fall through at any time.
Also, never give a round number as the estate agent will think that it is a general figure and that you are testing the water. However, a more specific figure and the reason why you have given it shows the seller that it is a thoughtful bid and are more likely to accept your valuation.
With these tips, you will be able to negotiate a good price with the agent and succeed in your endeavour.